Will Greater Mumbai Draft Development Plan 2034 Improve Mumbai's Real Estate Market?

Even though urban planning is enormously complex, basic principles of such an exercise are simple. On a fundamental level, urban planners and economists often know what works and what does not. Expertise is more common than sufficient political will to implement what we already know. The Greater Draft Development Plan, 2034, for instance, is an economically sound plan that would make homes affordable in Mumbai. The plan is also expected to expand the city's labour markets, transforming Mumbai into a vibrant city.

But, proposed in February 2015, this plan is now being revised by the Municipal Corporation of Greater . In April, the Maharashtra State Government asked the Corporation to revise the draft within four months, as the proposals in the draft plan were widely criticised. The draft was criticised because:

• The draft proposed raising the floor-space index (FSI) in Mumbai. Floor-space index is the ratio of the area of the floor of a building to the area of the plot on which the building stands.

• The draft proposed opening up zones for development. Currently, zoning regulations do not allow construction in these zones.

• The draft proposed opening up 1,287 acres of Aarey Milk Colony. This is a green area, where development is not allowed so far.

• There were factual mistakes in the draft, on current patterns of land use.

As the civic body is now revising the draft, the real estate markets in Mumbai are in a standstill. Real estate developers, landlords and home buyers hesitate to enter transactions because norms might change very soon. They are not too sure of the redevelopment rights of their own property. It is not clear to what extent the FSI would be raised in various parts of Mumbai.

Why is the Greater Draft Development Plan, 2034 important?

• Urban planning in Mumbai has been poor, by global standards. Most large cities in the world has maintained poor standards in urban planning at some point in history. But, over years, major cities across the world adopted policies that are sound enough to allow them to grow and flourish. But, Mumbai did not. The Greater Draft Development Plan, 2034, would have allowed Mumbai to break free from this pattern.

• Cities are made of the people inhabiting them. People who live in a city have profound needs that urban planners cannot alter. For instance, if people in a city need greater floor spaces, urban planners would not be able to change this. When urban-local authorities restrict it, people would either have to consume less space or move to another city. Unlike other major cities, Mumbai is so far stifled by plans that prevented the city from growing.

• We need large cities. In cities, people live and work close to each other. They trade with each other and learn from each other. By preventing a city like Mumbai from growing, urban planners have been preventing such trade and learning from happening. By raising the FSI and unblocking unused land, the draft development plan would have facilitated urban growth.

• Many tasks which people perform are connected to each other. In large cities, the number of people, who work together on tasks in which interdisciplinary knowledge is important, would be greater. Workers would be more skilled. It is estimated that cities that are four times larger would be 25 per cent more productive.

• Even though FSI in Mumbai is lower than in any major city, it is now a proposal to raise FSI many folds that is being under consideration. In a city like Mumbai, which has great topographical constraints (Mumbai is built on a narrow peninsula), a poor land use policy, weak property rights (over half the people live in slums), an inefficient transport system, and a high FSI is essential to make homes affordable.

• A city like Mumbai cannot afford to have large tracts of land unused. By allowing development in zones, in which development is currently now allowed, the draft development plan would have made the real estate market in Mumbai more efficient. Moreover, unlike small towns and villages, a city like Mumbai cannot afford regulations that prevent construction in coastal zones. The draft development plan proposed changing this. The Sahara Group owns 106 acres in the Goregaon zone, and by developing this land, it is estimated that they would be able to earn nearly Rs 20,000 crore. Such is the potential of unlocked land in Mumbai. The proposed MTHL bridge in Mumbai that would reduce commuting time in Mumbai, in contrast would cost merely Rs 11,000 crore.