Cluster Development: Is it worth?

The government of Maharashtra has accepted the revised recommendations of Cluster Development scheme for Mumbai. This scheme predicts restoration of old buildings, extending the present restoration policy to all buildings which are about more than 30 years old. This new policy is also applicable to suburbs, with a lowest plot of 10,000 square meters (sq. m) in size. The new proposal has lowered the owner’s consent from 100% to 70%, whereas the government keeps its discretionary power of rejecting or approving redevelopment projects.

But what is not clearly said, however, is that the policy will not at all help in reducing the shortage of living space rather it will worsen it and further hike property rates and rentals.

 Cluster Development Policy- Is it flawed?

• First of all, more than 30 years old building that is in perfectly habitable condition creates a productive national asset and abolishing a rare national asset is a loss to the nation. Also, the cost of abolishing a fit for living building is too much. Thus, redevelopment should happen only if the building is unfit for living.

• Secondly, a housing project consumes a great amount of rare and expensive natural resources. So, it would be better to build housing on unused land using these resources in order to increase the total availability of living than spending them for redeveloping an existing living space.

• Thirdly, how much time the offered redevelopment of these clusters will take, nobody can predict. Families who are currently living in their own homes will have to vacate and move to rental homes. That will eventually raise the demand for rental accommodation and hence worsen the demand & supply scenario by raising rental rates. In fact, the very possibility of redevelopment causes property rates to increase; as the future worth of the property gets reduced in the current flat prices.

 Even if we assume that a project continues smoothly, at the same time how many such large scale projects can be accomplished in the city? What effects it will do to traffic and pollution situation of the city throughout the construction stage?