Property Readjustment and a Tenants' Cooperative in Mumbai: Some Lessons and Questions

Abstract

A key virtue of urbanization is the possibility of using the market value of land to pay for its development costs. Many urban-redevelopment strategies, such as urban renewal, land readjustment, and land sharing, are based on this principle. Mumbai's tenement, or chawl, redevelopment programme is also a variation on the theme. The key promise of the programme is the resettlement of tenement residents in new, cross-subsidized housing on the original sites. The city's property readjustment strategy is ambitious, but deals with difficult contexts—contested claims by tenants and owners, potential for disagreements and conflicts, underdeveloped housing-finance institutions, reliance on real-estate values, and the risk of failure, overburdened infrastructure, and so on—and is hard to implement. Nonetheless, an advantage of the approach, and a partial explanation for the difficulties in implementation, is the ability to redistribute wealth to tenants. My normative position in this paper is that the pace of implementation should not be increased at the cost of the welfare of tenants. Although the strategy is far from being a panacea, I focus on public-policy recommendations to support redevelopment led by tenants' cooperatives, including technical assistance, conflict resolution, access to information, and housing-development finance. I illustrate and elaborate these arguments through a single redevelopment case.