Redevelopment of old properties in major cities in India is assuming colossal proportions with many of them past their prime. It is also a fact that many redevelopment projects are contrived and faked to convert small colonies to massive multi-storied concrete monsters to make some astonishingly fast money. Conversely, with the real estate prices souring, even some residents eye a larger pie of the spoils and approach builders in an unregulated market, without caring to check the credentials. Citizens, tax payers all their life, many of them senior citizens looking for a peaceful living in their life’s twilight zone, suddenly find their residences subsumed by errant builders.
A market that is highly dependent on informal economy, takes recourse to methods that are not always honourable. A lot of money changes hands in cash. Fly-by-night operators thrive and take gullible to the cleaners, before they even realise that they were played for a sucker. Redevelopment is the process of demolishing the existing old buildings, private or public, and re-constructing them, by appointing a good builder who can hand over new flats to the society, free of cost with some additional benefits and make profit by utilising balance plot potential, by constructing additional flats and shops as approved by MCGM in Mumbai or an appropriate body in other cities. Is this model above board in execution? Several cases of redevelopment in the past have proved otherwise. It However, is a cost-effective way to construct new and better houses, where Floor Space Index and Transferrable Development Rights can give the necessary fillip to an otherwise highly stressed industry.
Some redevelopment projects and programs have been incredibly controversial. The residents displaced by redevelopment are routinely under-compensated and some, notably month-to-month tenants and business owners are not compensated at all. Historically, redevelopment agencies have been acquiring rights of development or buying many properties in redevelopment areas for prices below their fair market value, or even below the agencies’ own appraisal figures, because the displaced people are often unaware of their legal rights and lack the will and the funds, to mount a proper legal defence in a valuation trial or even to safeguard their basic rights. Those who do so, usually recover more in compensation than what is offered by the redevelopment agencies. Urban redevelopment in India has been controversial because it forcibly displaces poor and lower middle class populations and turns over their land or houses to wealthy redevelopers for a below-market-value price. They then use that land to construct private shopping malls, office buildings, business establishments, and dealerships, and sometimes run even shady businesses.
Simply put, redevelopment starts with a concept, an idea, an agreement and ends with handing over the new flats to the society. The missing steps in the algorithm are the cause for worry. Changing government guidelines, formation of a society, delay in possession of new flats, contending with bouncers owing allegiance to the builders, corrupt members of the housing society, faulty draft of the agreement, letter of consents, recovery of dues from members, selection of a good builder, unauthorised construction by the builders and occupation without an OC, are all major challenges. Several redevelopment projects in our cities have succumbed to the complex alleys of procedures, and are stuck for decades, in the Courts. It doesn’t help that the residents are misinformed on the formation of a society to protect their rights. A society is an association of persons united together by mutual consent to deliberate, determine and act jointly for some common purpose. All that it needs is seven people coming together. The Societies’ Registration Act, 1860 lays down the procedure for society registration and operation.
A common perception that is peddled by the builder lobby is that the buildings cannot be redeveloped without being declared dilapidated. A whole chain of false events are then engineered, to declare them dilapidated. An unholy nexus with authorities makes the game dangerously skewed in favour of the builders. The role of structural auditors is also questionable and blatantly partisan. It is a matter of considered opinion as to where the non-destructive tests are conducted on the structure. Ultrasonic Pulse, rebound hammer, Half-cell potential, carbonation depth and core are all standard tests to determine the quality of concrete and steel. Where, are these tests to be conducted, or how many sample points required, for the entire building to be declared un-inhabitable and therefore dilapidated? Visual analysis may suggest deterioration. But then, an old building will always have blemishes like peeling plaster or cracks, signs which by themselves do not prove anything. Is it not then, technically possible to declare a building dilapidated or not, depending on what the society members, the authorities and the builder want? The serious concern However, is, having declared a building worth pulling down, the Damocles sword hangs on the residents to vacate, irrespective of whether the redevelopment project itself takes off or falls, the other serious dimension being the builder now getting an upper hand, with residents, virtually at his mercy, to re-negotiate and settle for far less or be herded to some godforsaken place leaving the builder laughing all the way to the cash bags. Demonetisation has only exacerbated the agony, by sucking away the cash money with the builder, rendering many of them and consequently their projects untenable, leaving the residents in the lurch.
Buildings of a pre independence India are the guinea pigs of the builder’s target practice. Some structural auditors, probably partners in crime, even give their considered opinion that the buildings are not earthquake resistant without conducting a single test for validity. All of them base their theory on Indian Standards created in and around year 2000. No Indian metropolis has witnessed a serious earthquake, although Delhi lies in high-risk seismic zone 4. Srinagar and Guwahati are in the highest-risk zone 5; Mumbai, Chennai and Kolkata lie in zone3. Has anyone checked, if current design standards were required when probably two floor buildings was the norm, a good eighty years back? Is it not true that some British standards were probably used then? Surely, multi-stories and sky scrapers may be a norm after year 2000, but certainly not in vogue then? How prudent is it to use current standards to evaluate them?
An even more ridiculous argument is that the buildings have outlived their life, are beyond the economy zone and hence are eminent candidates for being rebuilt. If this argument is to be taken at face value, more than 50% of buildings in Mumbai and other cities would have to be demolished and rebuilt, dilapidated or not. Redevelopment must be a most considered and debated decision for it impinges on the constitutional rights under article 14 and 21 of the residents. It certainly is not a knee jerk reaction that places a life time’s earning on a platter, to be exploited by a smart builder. As of now, redevelopment for both residents and developers across the country is a tough job. The developers are grappling with a massive unsold inventory of more than 7 lakh units in the top 7 cities alone. RERA governed markets has brought in some transparency but it still is, work in progress. Ignoring the all-important procedures and respect for rules, venturing into areas that lack infrastructural support, starting projects in micro-locations which already have too much supply, launching without adequate capitalization to complete projects, excessive focus on land aggregation, diverting funds meant for real estate projects to other ventures, and failing to innovate can seriously dent both the residents and the builder. Residents appear to be the proverbial lambs waiting to be slaughtered. MHADA’s launch of Self Redevelopment Cell in April this year may just make it easier for residents to redevelop their homes without relying on a builder. That appears the way to go.