How Ahmedabad Can Improve Its Land Use Policy

Like many other Indian cities, the land use policy in Ahmedabad, Gujarat, is very different from that of urban policy in cities across the world. In India, urban policy is based on the assumption that concentration of economic activity and building in a central city leads to road congestion.

In Ahmedabad, FSI (floor space index) is more or less uniform throughout the city. (FSI is the ratio of floor area to the area of the plot.) For example, if the FSI is two, the maximum permissible floor area on a 1,000 sq ft plot will be 2,000 sq ft. A uniform FSI leads to inefficient use of land.

Now, real estate players in Gujarat are keener on investing in cities like Bengaluru, Mumbai and Dubai because prices have been stagnant in Ahmedabad. As conversion of real estate in Ahmedabad is expensive, profit margins of developers are relatively low.

What could be wrong with Ahmedabad's land use policy, and how can the city do better?

• In major cities across the world, FSI is closely interlinked to the value of land. In , the FSI is 1.8. In the old city and village enclaves in Ahmedabad, it is 3. No major city in any other country follows such patterns in building restrictions. If the value of land is high in certain areas of the city, FSI would be higher in any global city because if land is very expensive, developers should be allowed to build tall buildings to utilise scarce urban land efficiently. But, this is not true of Ahmedabad. For Ahmedabad's labour markets and transportation system to function well, FSI should be higher in the CBD (central business district) and lower in the suburbs and fringes of the city.

• If land prices in the fringes of Ahmedabad are lower, allowing a higher FSI would misallocate land in Ahmedabad. By shifting low income individuals and firms to the fringes of the city, the land-use policy raises transportation costs. This also leads to air pollution because the high-density levels in Ahmedabad are suited for mass transit. Mass transit also requires high concentration of economic activity. There ought to be greater population density near mass transit corridors for it to be economically feasible. This requires high FSI levels.

• When Marie-Agnes Bertaud and other urban policy researchers did an inventory of unused land in Ahmedabad, they found that 32 per cent of the developed or developable land area in the city was owned by the public sector. By selling public land which is underutilised, the government can raise between $3.6 billion to $9.8 billion. This, it is estimated, is twice as much as the cost of building infrastructure for the next 20 in Ahmedabad. In Ahmedabad, infrastructure is minimal. By utilising such land, the government can transform Ahmedabad into a modern city.

• As the land-use policy moves people and firms to the periphery, it is difficult for the authorities to collect adequate revenues to build better infrastructure in the city. This also prevents the redevelopment of underutilised, valuable urban land.

• This may change very soon. According to a draft development plan 2021 for Ahmedabad, the proposed FSI for affordable residential projects is 2.2. In certain residential zones, developers would be allowed to buy an FSI of 1.8 or 2.7. In the 10-km square area surrounding the Sabarmati River, the proposed FSI is 5.4. Within 200-metre radius of Bus Rapid Transit System or Metro Transit system corridors, the FSI is four, though developers are expected to purchase FSI above 1.8 near transit corridors. This would lead to high density building which a city like Ahmedabad needs.

• The Bus Rapid Transit system of Ahmedabad is more successful than that of other cities. For example, officials who led the BRT system