By Ruchi Jain
In all our discussions on the replicability and segmentation of ‘model’ sustainable cities, we have assumed that the land has been available for the four ‘actors’ in Professor Macomber’s framework. Living PlanIT was granted the exclusive rights to purchase land in Paredes by the government, Phu My Hung received the land as capital contribution by the state-owned enterprise it was partnering with, and Masdar and KAEC were monarchy-led initiatives.
Step #4 from Professor Macomber’s Overall Framework for Sustainable Urbanization
The ease of availability of land is a critical assumption for some emerging markets, especially democracies such as India. The Law of Eminent Domain is a tough lever to pull for a democratically elected government, as officials often adopt populist policies which have short-term views. West Bengal has seen widespread protests over farmers being forced to sell their land at below-market rates for the Nandigram SEZ and for Tata Motors’ car manufacturing plant in Singur.[i] Reliance Industries’ SEZ planned as a satellite city outside Bombay has also seen farmer protests.[ii]
In my opinion, this means that the role of the four actors will differ vastly in different countries. In single-party systems such as China, the government will find it much easier to attract other actors to help build sustainable cities. In India, even “enlightened” officials will have a hard time.
Does this mean that multi-party democracies have no hope? I do not think so. It will be harder, but certainly not impossible. A variety of techniques can be used by private players and democratic governments to help build the nation, without straying down the “evil” path.
1. Offer to buy land from land owners at double the market price (as opposed to the registration rate) or relocate farmers to other fertile lands: This is certainly expensive for developers, but given that land value will appreciate after development, offering a more-than-fair price for the land is one way to get individuals to willingly sell the land. The state of Haryana has already started to demand market rates instead of the registration rate.[iii]
2. Buy land from the government through its new land monetization schemes: The McKinsey Global Institute assumes that the Indian government will be able to raise over 40% of the $1.2 trillion required for urban capital expenditures through monetization of government land.[iv] The Central government in India has started on this path already.[v]
3. Train and employ the citizens who depend upon the land for livelihood: This will hopefully prevent these farmers from migrating to existing cities and therefore also reduce slums in those cities.
4. Invest in soft infrastructure such as schools: McKinsey expects 590 million Indians to live in cities by 2030;[vi] these individuals will need to be employable within these cities. If education and health are not improved, India’s demographic dividend will turn into a deficit.
The private sector needs to aid the government in executing these sustainable cities. Large conglomerates such as the Tata group, which have historically helped build the nation (they built Jamshedpur, India’s first planned industrial city, they founded and owned Air India until the government privatized the carrier in the 1950s, etc.) need to continue doing so. However, the largest bottleneck is land – the government will have to devise favorable policies for the private sector to acquire the land and develop it in order to ensure sustainable development.