On Fri, Jun 18, 2010 at 11:37 AM, Kiran Jonnalagadda <[email protected]> wrote: > > Hello All, > I got into a dinner conversation a couple days ago over development rights. > Here's what I understand of it: > 1. What happens when a slum is rehabilitated? The slum dweller gets evicted > from his slum and is given a house somewhere. This house cost real money. > Where did that money come from? My understanding is that the government isn't > paying for it. They instead grant the slum dweller a "development right", a > right to build in excess of the limits laid down by the city corporation. > This is a tradable right, so a builder planning a lucrative sky scraper > project will barter this right for cheaper housing elsewhere -- and that is > the where the slum dweller gets relocated to.
Slum Rehabilitation policies are several and varied. Even in a city like Mumbai, there are several slum redevelopment schemes which makes each case of rehabilitation highly nuanced. Further, slum rehabilitation is nowadays part of mega infrastructure projects such as metro rail, commonwealth games, etc. The policies for slum rehabilitation under these mega projects are decided by the Special Purpose Vehicles (SPVs) which are created to implement these projects. Under mega infrastructure projects, persons whose lands and properties come in the way of the creation of the project, be it a road, bridge, flyover or metro rail, are compensated according to the policies. Usually, land owners are compensated with TDR while those who have houses/built structures/shops are awarded with housing tenements / commercial spaces. In Delhi, people who were displaced under the metro rail and common wealth games were given plots of land as compensation. The displaced persons then had to built their own structures on these plots of land. Savda Ghevra is one settlement on the border of Delhi and Haryana where displaced persons and households have been given plots of land. In Mumbai where the land belongs to the Collector, people are given 20 by 20 sites to rehabilitate themselves. Of course, there are lots of contestations over the award of compensation in lieu of land and property acquisition. In my Ph.D. thesis, I have tried to show how these rehabilitation policies open up various kinds of property markets in the sites where people are likely to be displaced, in the rehab sites as well as in the sites surrounding rehab sites. In the case of slums, there is a great deal of very good research which shows how ownership of a house is different from ownership of land and how claims, entitlements and tenure security manifest differently in each case. When it comes to slum rehabilitation, it is the builders in Mumbai who get Development Rights in form of Development Right Certificates (DRCs) because according to the erstwhile policy of the government of Maharashtra, those developers who come forward to redevelop slums free of cost get what is known as Slum TDR in exchange. TDR is granted to the land owners because according to the rationale of TDR (which was first introduced for farm lands lying on the peripheries on American cities), TDR is the instrument which local governments and planning boards use to compensate land owners because these government bodies do not have the money to pay to the landowners in lieu of the land acquired. So TDR is seen as an 'effective' instrument for compensation. The logic of TDR is that if you as a land owner is giving up your land for development of a public amenity such as a school or hospital (known as Amenity TDR in Mumbai) or for conserving heritage (known as heritage TDR) or for slum redevelopment (slum TDR) or for rehabilitating project affected persons (known as PAP TDR), then you can use the development rights on another plot of land that you own in another part of the city. In Mumbai, you can ONLY use the TDR to the south of the area which generated the TDR in the first place. Which is why builders die for Slum TDR in Mumbai because you may rehabilitate a slum in a woe begone place like Chandivali but you can use your Development Rights in a posh area like Bandra or Andheri! The alternative for a land owner who is compensated with TDR and who does not have another plot of land to use this TDR on, can sell the DRCs in the 'open' market. What is unclear and unknown is this 'open market'. No one has any idea of how and at what costs DRCs are traded. Further, in Mumbai, the TDR market is dominated by large developers who vie to purchase slum TDR because under slum TDR, the builder gets 2.5 FSI which is the highest when compared with heritage, amenity and PAP TDR. Nowadays of course, the highest amount of FSI granted under TDR is for redevelopment of cessed buildings in Mumbai which are old and dilapidated. Here the housing board namely MHADA has offered to builders that because MHADA itself cannot redevelop the shaky buildings, those builders who will come forth to redevelop these shaky buildings will get unlimited FSI which means buildings touching the skies! The unlimited FSI is possible in this case because most of these buildings were developed in a period when there were no FSI regulations! In Bangalore, the issue with land owners accepting TDR in lieu of surrendering parts or entire properties is that most of them usually do not have extra land on which they can use the TDR. Further, the TDR market is neither developed here and nor is the TDR market the cup of tea of individual buyers and sellers. In Mumbai, the TDR market works because it has been fully developed and dominated by large developers. Of course, there have been times when so much excess slum TDR was generated that there was a slump in TDR prices and builders had to halt all their slum redevelopment projects! An interesting book, which though inadequate, is by Vinit Mukhija called "Squatters as Developers" and another excellent one edited by Alain Durand-Lasserve and Lauren Royston is "Holding Their Ground". Mukhija's book explains the institution of Slum TDR in Mumbai and how squatters became instrumental in this process - the analyses and conclusions I don't necessarily buy with but it gives an interesting background history. > 2. If you buy an apartment and twenty years later, there's a flood or > earthquake that leaves the foundation weak. The building is demolished. What > asset are you left holding? It's not land, it's a development right to go > vertical. The Alternative Law Forum has a bunch of interesting materials regarding Development Rights. There is also a useful article I can share about real estate which raises questions about what is it that you 'own' by virtue of 'owning' real estate. The issue is this: when you buy an apartment, one of the documents that you get when you have the flat transferred in your name from the society is the Share Certificate which is a document that entitles you to a share in the property. What is unclear is what is your share exactly in? Is your share in the land but it is very likely, as it happens in Mumbai, that builders have built on lands which are leased from some individual or government institution in which case, you cannot claim a share in the land? Development Rights are an interesting animal - the more you learn, the less you know and further, how development rights translate on the ground and how they are brokered in various situations goes on to show that property rights are not an absolute given. Property Rights also translate in time and context. In Mumbai, we have the cooperative society movement which clearly says that you may be the individual owner of the apartment but the rights over the property are collectively owned by the cooperative. Which is why you pay for transfer charges when you buy a flat to the building society. In Bangalore, I have not found the cooperative society movement too strong. In the case of slum rehab, this gets even more complicated. It is touted that a house is a source of tenure security for slum dwellers. In Mumbai, the land on which the building stands is usually leased from the municipality for 99 years which means the slum dwellers don't own the land. Then, the building stands in the name of the cooperative which means no individual rights. Then, what kind of property rights are people given? On that note, even the proponent of property rights, titling and property transaction databases Hernando De Soto is unclear what property rights mean in terms of workings on the ground. Nobody, to my mind, has an answer to this question - another controversial topic to discuss. > 3. Hosur Road in Bangalore is being widened all the way to its starting point > from Brigade Road. The Johnson Market area is particularly narrow and raises > many tensions for the folks who will lose land (including a popular mosque). > One of the key tensions is that the market value of land is far higher than > the official value, because market trades are half black, which everyone > knows, but which the government cannot recognise. They cannot pay in cash for > market value. They have proposed paying with development rights. As rights > can be traded for cash, but don't have a consistent, accepted conversion > value, the market will bid for them, thus sidestepping the black market for > direct trades. The contestations in this case will be among the santhe and market vendors as well as tenants who have rented spaces to carry out their trades - do these people get development rights? Unlikely. When I had written an article on TDR in Bangalore in early 2008 on www.citizenmatters.in, I had found that people in this area had not accepted TDR and were not conceding to road widening. In a meeting on road widening which I attended recently, an engineer from BBMP said that they are widening roads in areas where institutions have given up lands for TDR and then leaving parts of the road stretches as it is where people were not accepting TDR. I don't know what the status is on Johnson Market now. > The affected parties have been unwilling to accept development rights, > however. They argue that the market for development rights is not > sufficiently well developed. The right says you can build in excess of the > city corporation's building limits (number of floors allowed in a building, > for example). This only works if the city corporation is capable of enforcing > these limits. This is a form of fiat currency. It is fiat currency for those who know how to play the TDR market. Nobody really knows where is the TDR market and how it functions in reality! Further, it is even unclear whether you can use TDR to 'regularize' illegal constructions. There is no clear mandate on this. When some people in Bangalore who were offered TDR asked me for advice on whether they can use the TDR to build on existing constructions which would be violation of planning rules for the respective neighbourhoods, I referred to them to friends in planning boards in Mumbai who in turn said that this cannot be done - you cannot regularize irregularities through TDR. But who knows how TDR works on the ground - I for one surely does not know. Maybe the brokers who mediate the market know well. > This explains why the Bangalore Development Authority (BDA) and other > corporations in India go on regular demolition drives against "unauthorized" > constructions. They cite safety concerns, but as recent fire accidents have > shown, they can always be bribed out of it. The real motivation is in > establishing the value of the development right. I don't agree with this. There are various motivations for carrying out demolitions. And TDR, whatever its value, is unlikely to be accepted in Bangalore too easily because individuals are land owners and also, the parcels of land that are being acquired and the TDR that is granted in lieu of that is really worth NOTHING for a builder who wants to develop a large residential or commercial project! After all, what TDR will you get for surrendering 22 square feet of land? In Mumbai, acres and acres of lands have been surrendered which is why the TDR generated is worth zillions and is even priceless in some cases! > If you think about it, development rights only work when you have multi-story > buildings. They have no value with low-rise urban sprawl. They work great in > Mumbai, barely in Bangalore. And yet, Bangalore's new found enthusiasm with > them points at a corporation that wants to have a role in shaping the city, a > role defined with real power. Not sure how to respond to this! > I think this is utterly fascinating because when you look at a > skyscraper-dominated city now, it's not just about the wealth and the > geographical constraints, but about a system of trade in property that can be > de-coupled from the real estate on the ground. To me, this sounds a lot like > de-coupling currency from the gold standard. Development Rights are not new. You always had them by virtue of possessing property. What matters is how and when they come into play! > --------- > I'm pretty sure this description is sketchy, full of gaps and perhaps > incorrect. Help me understand how. Is there a good book on the subject? There will always be gaps when it comes to issues of property and planning because the rules change according to regimes and times (value not being a constant and land scarcity being acute in some periods than in others). Check some of the American literature on TDR. TDR originated in the US. But as for the workings of TDR in American cities, planners themselves know that the planning authorities in the US are highly corrupt and arbitrary and the TDR markets there are also dominated by large developers! Cheers, Zainab > Best, > Kiran > > -- > Kiran Jonnalagadda > http://jace.zaiki.in/ -- Zainab Bawa Ph.D. Student and Independent Researcher Gaining Ground ... http://zainab.freecrow.org http://cis-india.org/research/cis-raw/histories-of-the-internet/transparency-and-politics
