Slum lords as entrepreneurs

By Alice Heathcote

Annawadi sits beside the road to the Mumbai airport, on “a stretch where new India and old India collided and made new India late”

Behind the Beautiful Forevers, Katherine Boo

After much insistence my mother, I recently started reading ‘Behind the Beautiful Forevers’,a non-fiction work from Pulitzer prize-winning journalist Katherine Boo. The book follows the lives of the inhabitants of Annawadi, a slum settlement in the shadow of luxury hotels near the Mumbai airport. The main character, Abdul Hussain, is a Muslim teenager who turns an increasingly success profit through reselling the recyclable garbage that richer people throw away. He begins to dream of a life outside of Annawadi, and even a wife who ‘does not care that he smells’. His success catches up to him however, when his next-door neighbor attempts suicide and he is falsely accused of her murder.

At this point, the true tragedy begins to unfold. In the legal vacuum of Annawadi, the Indian police are anything but a force for good. Despite the fact there are hundreds of residents to prove his innocence, Abdul is charged. The police know his family has money stored away and they have an angle now for getting a slice. Police officers arrest the accused and demand bribes; when Abdul’s mother refuses to pay most bribes, family members are imprisoned and beaten. The story gives us an inside view of the Indian criminal justice system, in which success will attract resentment, unwanted attention from authorities and a higher price tag to buy yourself out of jail. Continue reading

Planned Urban Developments versus Natural Gathering Points

By John Niehaus

One thing that struck me after seeing the slides on Kumbh Mela was this remarkable difference between forced urban developments, like King Abdullah Economic City and Masdar, and natural points of gathering, like Kumbh Mela every 12 years. Throughout history, most cities in the world have been created by being natural points of gathering, either for religious, cultural, or economic purposes. However, the rise of powerful and wealthy central governments with a growing middle class, for example in China, Saudi Arabia, and the UAE, has led to an increasing trend of governments choosing(or attempting) to locate and build cities as they see fit. Continue reading

Resident Annoyance

By Galen Laserson

“My idea of a perfect school…is one that has no children in it at all.  One of these days I shall start up a school like that.  I think it will be very successful.”

– Headmistress Agatha Trunchbull (from Roald Dahl’s Matilda)

Building sustainable cities would be easier without the presence of a confounding factor:  the people who live in them. Living PlanIT illustrates some challenges of building and attracting people to a green field “city.” For the most part, sustainability efforts focus on making infrastructure improvements to existing cities teeming with residents who are accustomed to or aggravated by the status quo (or both). Thus, managing change is integral to urban redevelopment.

Residents are the gatecrashers poised to overrun the public-private partnership party.  In the Dharavi case, the interests of the area residents, which should arguably be a central priority of any city plan, were expressed as an afterthought.  Though Dharavi offers a pointed example, the complexities that residents surface through their behaviors and desires are omnipresent and powerful – from the dueling interests of groups of citizens in Bogota to the conflicts between citizens and water bandits in Mexico City.

People generally do not like change, especially when it involves accepting short-term pain to achieve a long-term goal (ask anyone who lives on Second Avenue about Manhattan’s new subway). How, then, do entities responsible for championing infrastructure improvements or urban development engage effectively in change management? Continue reading

Markets build bad cities


The cases of Paredes and Dharavi are examples of a centralized approach to urban development. Both were led by private consortiums and supported by public-private partnerships. Both aimed to create a safer, more sustainable living and working environment for the people who would live there.  And, as we discussed, both seemed destined to fail. However, I would argue that we should draw markedly different conclusions from these failures about the role of central planning in the growth of cities.

There are two kinds of cities in the world – those home to over 50% of the world’s population today, and those that will absorb nearly 100% of future growth for the next four decades (with a considerable degree of overlap). Cities like Bombay are adding over a thousand people per day – new neighborhoods springing up overnight. Governments are able to direct this growth to an extent through regulation (e.g., zoning) and the provision public services (e.g., mass transit). Markets do the rest.

In the case of Dharavi, markets may be enough, provided slum dwellers gain legal ownership over their homes. Offering land rights to families who have lived in the same home for generations is a complex process, but one with a relatively clear outcome – organic, continuous real estate improvement. When managing a built environment, the government has far greater constraint on sweeping public works projects. The process of razing thousands of homes and relocating thousands of families in Dharavi was virtually guaranteed to be corrupt and unpopular.

At the same time, markets seem to be bad at developing sustainable cities. As most industries have become more efficient, real estate development by some measures has become less so. Living PlanIt proposed to eliminate the massive waste endemic in traditional construction and urban design by building a ‘city’ from scratch. While they ran up against massive coordination and complexity problems, the idea was cogent. Centralized planning and development can ensure that the design and spacing of every building makes sense from an efficiency standpoint, and capture huge savings in reduced energy use and CO2 emissions. While there is a risk of building a ghost town (e.g., in China), there are ways to mitigate this risk (e.g., using large businesses as anchor tenants).

As governments look to create room for new urban populations, they would do well to review examples such as Living PlanIt and New Songdo City for inspiration. Greenfielding a city center is no easy task, but getting it right may be the best way to create a sustainable path for urbanization. For existing urban centers, government should focus on installing the right regulations and public services, rather than rebuilding from scratch.

Broader solution to slum redevelopment

By Candy Tang

With respect to slum redevelopment, it would be more effective to grant residents title to the plots of land the currently occupy and then let market forces work, rather than looking to large scale redevelopment via professional real estate firms.

If we could all agree that one major goal of slum redevelopment is to improve the welfare of its residents, there is no better way than to grant residents the property right as a solution. A great majority of the world’s largest slums such as Orangi Town, Neza-Chalco-Itza and Dharavi are near the heart of the city. They constantly provide low-cost labor to the city but they don’t share in the growth of the city in the form of land appreciation. Assuming liquidity is high in these real estate markets, which is always the case in rapidly developed cities, slum dwellers could monetize the benefits and they are in the best position to decide when to sell and how to distribute the proceeds accordingly.

Large scale redevelopment rarely works because it is a matter of housing, job and freewill. None of this could be compromised. Take Dharavi as an example, with 80% of people self-employed in the slum’s core businesses in leather, recycling, garments and pottery, residents declared they will not agree to any development plan unless they are allotted the same amount of workspace they currently occupy. This ‘city within a city’ is a model of economic efficiency and productivity, a place where most things appear to be broken but everything seems to be working rather nicely.

It is not only economic considerations that lead people to oppose the redevelopment, but cultural considerations as well. The redevelopment proposals may erode the slum dwellers’ traditional ways of life and disrupt communities with rich histories. Its residents have a very clear sense of their own identity; they have hopes and aspirations, and a genuine belief that these are achievable. Real estate developers’ financial models only take into consideration of the cost of rebuilding the house, but not rebuilding the neighborhood. Redevelopers will not and cannot build the social and commercial networks of the self-sufficient economy of the slum.

If a broader goal is to build a slum-free city to increase the competitiveness or appearance of a city, isn’t the idea of “slum-free” a bit self-contradictory? The central problem is not slum, but a missing middle class in the context of extreme inequality and the increasing number of migrants that the city couldn’t properly accommodate anymore.  It therefore requires a broader solution, the key of which is to increase the equal opportunity and social mobility. Besides entitling people with proper rights, it requires constant investment in public goods such as education and a more rigorous champion to root out corruption.


Charter Cities: A Tool to Address the Failures of Government?

By Anonymous

When public resources are limited, governments can use public-private partnerships (PPP) to solve their largest problems, while minimizing the use of public assets. However, what if the government and its policies are the problem? In places like the Dharavi slum of Mumbai, the government has failed for decades to enforce property rights and laws, provide basic sanitation or foster prosperous economic conditions. Solutions that do not address the failures of such governments are tantamount to treating the symptoms of a chronic medical condition instead of curing the disease; they are wasteful and only prolong the underlying issue. An optimal solution needs to address root problems with such a government; posing the question, can a PPP provide safety, security, sanitation and pro-growth economic conditions? In other words, can a PPP be leveraged to provide even the most basic public goods traditionally provided by the government?

Professor Paul Romer of NYU’s Stern School of business believes that PPPs can accomplish such goals in through the charter city concept. A charter city would create a special economic zone (SEZ) that would be administered by a semi-independent government, unrestricted by economic policies of the sovereign nation and funded by external investors. Residents could choose to live or work in the SEZ or to remain in their current conditions. Under such a system, the SEZ’s government could develop its own laws and electoral practices, provide its own services and create conditions amenable to economic growth. The sovereign state would receive tax revenue from the charter city for use of the land. In order to succeed, the SEZ would have to earn the trust of the residents by providing services superior to those of the sovereign nation. If successful, the practice could be scaled or better yet emulated by the sovereign government. Such a solution would address the root causes that lead to slums in Dharavi and provide the investment and incentives to both the residents and government to redevelop these areas.

Of course, Romer’s concept can be criticized due to the additional implementation challenges it faces. First, convincing a government to fire itself and outsource its sovereignty is a hurdle beyond the traditional challenges of development projects. In fact, political gridlock ultimately blocked Romer’s attempt to execute this model in Honduras. Furthermore, the concept can be interpreted as a privatized regression to colonialism, a model that would be met with deep suspicion in a country like India, which recently gained independence from its colonizers. However, with adequate protection of rights and enough transparency to demonstrate the fairness of system to all stakeholders, such challenges could be overcome.

However, as demonstrated by previous redevelopment efforts in Dharavi, PPP solutions are not effective if they do not address the problem underlying the need for development. In extreme cases like Dharavi, where the government is the problem, if implemented correctly, charter cities can provide the requisite change to provide sanitation, safety and opportunity to those whom have not received it from their governments.

On Density, Desirability, and Happiness


High density is often praised in relationship to sustainability because of the efficiencies in managing resources and benefits regarding shared transportation. Economists have also concluded that workers in denser places earn higher wages and are more productive. Studies show that doubling the density increases productivity by 6% or more. And there is an interesting 25% correlation between population density and gross metropolitan product per capita. (1) (2)

However, density is not a magic elixir. Many developing cities are struggling with overcrowding, traffic congestion, providing adequate infrastructure for water access and sanitation. In the case of Dharavi, we were looking at a slum redevelopment that would result in a population density of about 313,900 ppl/km2. The final image visualizing the massing of the proposed design, based on the 7 story’s maximum height policy, offered a terrifying view of the future – not that different from the Soviet housing projects developed during the 60s, many of which are now abandoned or soon to be demolished.

So, I wanted to explore if there is such thing as an “ideal” density. In other words, is there a correlation between the density and the perceived desirability of the city? How does it change with economical and growth differences?

If we look at the rankings of the “most livable cities” (3) and their density we can observe the following correlation:

Roure density

Cities that systematically appear on the rankings of “livability” are: Zurich, Helsinki, Copenhagen, Vienna, Munich, Melbourne, Sydney, Auckland, Paris… In this study I included the 20 most acclaimed cities amongst the 3 most important rankings: Monocle, Mercer, and EIU. The average density of these 20 cities is of 3800 ppl/km2 and the deviation can be disregarded.

Although there is much debate about the criteria behind these reports, they have to do with very high ratings on safety/crime, quality of architecture, public transportation, urban design, business conditions, environmental issues and pro-active policy developments.

On the other hand, all of the cities in this list are in stable, democratic countries, have gone through a diligent constant improvement over the last, not only decades, but also centuries, and stand today with some of the highest gross metropolitan product per capita of the world. These could be thought as the most desirable cities for the top 5% of the population.

The challenge arises when addressing emerging citites such as Mumbai, Bangalore, Beijing, Shanghai, Chongqing, New Delhi or Bogota (4), with densities from 3 to 10 times higher than the “ideal” 3800ppl/km2. Slums in these cities have a key socioeconomic role, they are often used as a gate for immigrants coming from rural areas to find a temporary settlement and to eventually be able to find a job and thus enter the formal market. The precarious living conditions, sanitation deficiencies and corrupted informal economies are a source of anxiety.

If we think back on the history of some of the chosen “most livable cities,” we find a recurrent pattern of explosion of growth with subsequent stabilization. Yet the scale of these new metropolis and building capabilities are unprecedented. Even if we can greatly learn from existing urban models, new challenges will need to be addressed – for which testing and a great degree of political will be needed.



(3)’s_most_livable_cities links to Monocle, Mercer and EIU

(4)  Global Cities Index and Emerging Cities Outlook