PDF: 2962 pages, 5.2 MB - Bay Area Council Economic Institute

Architecture/Urban Planning/Infrastructure
grant funds to help disadvantaged castes and tribes, with temporary relocation of slum residents
to transit camps while buildings are constructed.
Relocation, even with the promise of new housing with clean water and electricity, has faced resistance:
slum dwellers pay minimal or no rent and are not subject to tax or business regulation; configuration
and use of hutment space is flexible. At least 60% of residents must agree to relocation
unless they are evicted as part of a government-sponsored project, and there has been mixed support
at best for most redevelopment schemes. A second question is where so many people can be
physically relocated. Planning theory normally holds that slums be relocated from the urban center
where land is most in demand and valuable, to the city periphery. But density restrictions in the city
centers have also pushed new development outward, so that metropolitan areas in India simply
keep expanding, creating new centers and increased demand for infrastructure and services.
New buildings, business parks, and campus complexes are built in the absence of connecting
roadways, mass transit, and reliable water or power. Blackouts are common, requiring nearly all
major commercial buildings and facilities to invest in their own backup generation. The fact that
developers and owners often provide their own services, independent of public grids, in turn
dilutes the critical mass of customers needed to expand those grids and services to meet future
demand. Infosys Technologies, for example, spends $5 million annually on buses, minivans, and
taxis to enable its workforce of 18,000 to commute to and from its facilities in the Electronics City
office park outside Bangalore. Electronics City has its own dedicated water and power supplies.
(An excellent survey of urban planning issues in India can be found in the Worldwide Fund for
Nature’s 2009 report The Alternative Urban Futures Report: Urbanization and Sustainability in India.)
Foreign Investors Step In
As mentioned previously, India faces a total housing shortage in excess of 20 million units; its
tourism secretary has predicted a shortfall of 100,000 hotel rooms through 2010. Urban office
space throughout India totaled about 60 million square feet in 2007 (New York, by comparison,
had 400 million square feet); 25 million square feet was in Bangalore alone, and 9 million of that
had been built in 2006.
In its 2009 Real Estate Investment report, Cushman Wakefield India estimates nationwide demand
for new residential housing at 7.5 million units for the 2009–2013 period—85% of that in
the affordable and mid-market segments. Demand for commercial office space is projected at
196 million square feet, including 43 million square feet of retail. Most of this development (60%
of housing; 40% of office space) will be concentrated in India’s seven largest cities—the
National Capital region (New Delhi and its surroundings, Mumbai, Bangalore, Chennai, Pune,
Hyderabad, and Kolkata)—with Bangalore topping the list for both retail and commercial
demand and Mumbai expected to see the highest demand for housing.
Foreign direct and portfolio investment have flowed in since early 2005 to help fill the gap. Previously,
foreign ownership participation in real estate properties and development projects was restricted,
except for hotels and for planned communities of more than 100 acres. In February 2005,
rules were relaxed to allow 100% foreign participation in any construction/development venture
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