When the Phoenix Mills compound in central Mumbai reopened in 1999 after a long closure, the former textile factory complex featured a bowling alley and a nightclub. It bore the distinction of being the first mill compound in Mumbai’s storied textile mill district—Girangaon, or the village of mills—to transform itself from a manufacturing space into a leisure and consumption destination. To add insult to the injuries inflicted on idled mill workers, who had to watch as the city’s elites came to bowl and dance at their former workplace, one of the mill’s smokestacks was retained in the new entertainment complex and painted to resemble a bowling pin (Krishnan 2000 ; D’Monte 2002).
For many observers, this change (and the subsequent and rapid transformation of the rest of Girangaon’s mills and tenements along similar lines) best exemplified the city’s transition to a postindustrial economy. These changes were accompanied by the “redevelopment” of slums and a rapid urbanization of the city’s suburban regions through a proliferation of high-rise apartment-building complexes. The economic liberalization program undertaken by the government of India from 1991 onwards has usually been seen as the moment when market forces gained dominance on the Indian economic scene, which in turn has been used to explain the increasing commodification of land in cities like Mumbai.
In this article, I historically situate the post‑1991 proliferation of real-estate accumulation within the political economy of land and housing in Bombay and Maharashtra (the state within which the city lies) of the late 1970s and early 1980s. In particular, I consider two avowedly progressive pieces of planning legislation that sought to impose urban land ceilings to curb land speculation, and to maintain rent control. Promulgated during the peak of Mrs. Gandhi’s socialist/populist period during the mid‑1970s, the subsequent trajectories of these urban planning interventions should be understood in the context of local, regional, and national politics, as well as in the context of pressure from the World Bank to undo these measures. Emphasizing the contingencies entailed in efforts to implement such planning interventions in complex political contexts, I establish connections between the trajectories of these progressive planning interventions and two prominent features of the post‑1991 real-estate context in Mumbai : the notion that private actors were better placed to construct affordable housing and should be offered incentives for doing so, and the notion that “redevelopment” of older, dilapidated tenanted buildings into new, nicer buildings with ownership occupancy constitutes affordable housing.
Congress “system” under threat
After Independence in1947, as Bombay was assimilated into Maharashtra state, the city’s fortunes could now be greatly influenced by voters and politicians from the hinterland. The divergent interests of the Gujarati industrial and landed elites in Bombay City and the Marathi-speaking agrarian elites of Maharashtra were initially accommodated—albeit in uneasy fashion—through the traditional Congress “system” of center–state–city mediation. [1] Following Indira Gandhi’s ascent to the prime minister’s role on a populist platform in the late 1960s and 1970s, this balance between local, regional, and central interests was unsettled. Regional elites—Maratha politicians with their base in the powerful sugar cooperatives of Western Maharashtra—sought to extract more from cash-rich but votes-poor cities like Bombay, while the central Congress structure sought to reassert its hegemony, often in alliance with city party elites. The efforts to centralize and regulate the governance of land and housing in the 1970s need to be understood within this changing politico-economic context.
Protest by city elites notwithstanding, state-level authorities consolidated control over urban space over the 1970s. Perhaps the most dramatic instance of such consolidation was the passage of the Urban Lands (Ceiling and Regulation) Act in 1976 (henceforth ULCRA). ULCRA imposed a ceiling on the ownership of urban lands and was intended to curb speculation and achieve the socialization of land. Land in excess of the ceiling could now be acquired by the state for the purpose of building affordable housing and other public amenities. Despite these high-minded goals, the consensus appears to be that ULCRA had almost exactly the opposite effect. Containing imprecisely worded provisions for exemptions, the legislation was utterly compromised by landowners who co‑opted state officials. The implementation of ULCRA not only froze the supply of land, as landowners contested acquisition efforts in the courts, but also increased the capacity of politicians and bureaucrats to extract rents from their ability to award exemptions.
Such concentration of state government power over building activity reached its apotheosis during the brief but eventful tenure of Abdul Rehman Antulay as chief minister from June 1980 to January 1982. A Muslim from the Konkan rather than from the dominant Maratha–Western Maharashtra–sugar lobby constellation, Antulay was widely seen to be Indira Gandhi’s man, appointed by the Congress high command to break the power of an increasingly rebellious state-level Maratha satrapy (Economic and Political Weekly 1982 ; see also Datar and Ghotale 2013). Intervening in rent extraction in Bombay real estate should thus be seen as the central party organization asserting itself against the state elite.
If capture of regulatory powers by state actors constituted one bottleneck in the supply of housing, then the effect of rent control was another. The current Rent Act, dating from 1948, freezes rents on older structures at 1940 levels. By the 1970s, the fact of low rents meant that private owners of buildings simply refused to maintain them, with the tragic outcome of regular building collapses. By the late 1970s, it was acknowledged that a stalemate had been reached : rent control could not be undone, but neither could building owners be made to maintain their structures.
A committee appointed in 1976 during a periodic review of the Rent Act (and charged to study the associated problems of rent control and dilapidated housing stock), henceforth referred to as the Tembe Committee, recommended solving the problem by paying off building owners and transferring ownership onto cooperative housing societies formed by the tenants (Government of Maharashtra 1977). In making this recommendation, the Tembe Committee did not see itself as promoting private ownership of apartments in preference to renting. To the contrary, the report saw its recommendation as in line with the recently passed ULCRA. Cooperative housing societies were a form of collective housing promoted in Nehruvian India, [2] and this move to recommend transfer of ownership to cooperative housing societies should be understood as an attempted socialization of apartment dwellings, very much apace with ULCRA’s purported effort to socialize urban lands. [3]
Restoration of center/state/city alignment
Both ULCRA and the Tembe Committee report dated from the time of the Emergency, [4] when Indira Gandhi’s socialist rhetoric was at its zenith. Following her ouster in 1977 and subsequent return to power in 1980, she changed economic course and embraced a pro-business policy. [5] This shift in thinking at the national level had its reverberations at the Maharashtra and Bombay levels as well, with the central government issuing a “suggestion” to the states asking them to reconsider their rent-control and land-ceiling legislation with the goal of “removing impediments to genuine construction” (Times of India 1983a). The embrace of a pro-business stance at the center was accompanied in 1983 by a politico-economic restoration of the traditional Congress equilibrium in Maharashtra, as Vasantdada Patil was returned to the chief-ministership, and central, state, and city-level party structures once more brought into alignment.
The two shifts above shaped the political context for the reception of the World Bank’s Bombay Urban Development Project. The Bank had proposed a massive site and services scheme as well as a slum upgrade scheme for the city, for which it promised to lend up to $280 million, perhaps the biggest project it had at that time undertaken anywhere. It made the extension of credits towards the Bombay Urban Development Project conditional on the lifting of rent control, as well as the adoption of more “realistic” land policies (Jha 1984 ; Abraham 1983).
The conjuncture of imperatives at the state, national, and global levels had the effect of forcing resolutions to the problems of urban lands and buildings. Yet the changes did not unfold in a predictably “neoliberal” direction. In June 1983, the Maharashtra government announced a “new land policy” to address the frozen land market. This policy acknowledged that the state government lacked the resources to acquire and develop surplus lands, as originally envisioned by ULCRA. Instead, the new land policy invited private developers to undertake the development of surplus lands and offered extra FSI [6] as an incentive (Times of India 1983b). The state thus divested itself of the crucial role of itself acquiring and developing the lands, which had been a pillar of ULCRA’s land socialization agenda, while retaining rent-extracting capability.
Very soon thereafter, the proposal to convert tenants of dilapidated buildings into owners received legislative underpinnings in a context of political assertion. In 1980, the same year that Antulay was advanced to the chief minister role, the Congress high command had also sought (unsuccessfully) to advance city party boss Murli Deora into the Lok Sabha (lower house of the parliament of India) in an effort to strengthen city elites over regional elites. During his second bid for the Lok Sabha in 1984, seeking to expand his base in Bombay, Deora took up the cause of tenants and made the possibility of their becoming owners one of the central planks of his campaign (Times of India 1984). Upon winning he delivered on his promise, and legislation was passed enabling tenants of rent-controlled buildings to purchase their apartments upon payment of 100 months’ rent to the owners. As with the “new land policy,” here, too, a crucial element of the socialization program was missing : whereas the Tembe Committee report had strongly recommended that the government make low-interest loans available to poorer tenants so that they could afford the payoff, the version of the legislation shepherded through by Deora was criticized for lacking precisely this provision (Date 1986). [7]
Thus, by around 1983–1984, both the land policy and the dilapidated buildings proposal had assumed a form that departed from the socialization agenda envisioned in 1976–1977. While this was partly due to pressure exerted by the World Bank from around 1980 onwards, the outcomes described above were necessitated by political considerations at the national, state, and local levels.
Conclusion
Much of the dramatic urbanization of suburban Mumbai of the late 1980s and the 1990s—Lokhandwala Complex in Versova, Hiranandani Gardens in Powai, Raheja Township in Malad—took the form of high-rise gated communities containing expensive ownership apartments in the form of cooperative societies. Astoundingly, all the developments mentioned were on lands that had been exempted from ULCRA with the understanding that they would also yield affordable housing (Narayan 2003 ; Times of India 2007). These developments are seen as representative of post-liberalization, real-estate-based accumulation. Meanwhile, the “redevelopment” of older, tenanted buildings and their conversion into buildings with privately owned apartments proceeds at a rapid pace. Finally, the mill district of Girangaon, too, has been transformed into a cityscape of high-end apartment buildings, malls, and office towers by the mill owners, now refashioned as real-estate developers.
This article has argued that two of the pillars of real-estate accumulation in post-liberalization Mumbai—the awarding of incentives such as FSI to private developers to build affordable housing (and the subversion of this mandate), and the “redevelopment” of older tenanted buildings into an ownership-based model—had their origins in very different contexts. They were shaped by the ways in which progressive regulations like ULCRA and the Rent Act played out within the politico-economic context of land and housing in Bombay. Especially significant here has been the contest between scales of power and governance. Recent years have seen naked efforts by state and national actors to capture value in the form of real estate in Mumbai (Balakrishnan 2018). It is surely true that India’s liberalization in 1991 and the more general spread of neoliberal policies greatly increased the velocity and volume of the circulation of capital and its investment into real estate in places like Mumbai. This article has shown how an older set of ideologies and practices, subject to contingent developments, came to constitute the bases upon which real-estate accumulation in Mumbai operates.
Bibliography
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- Narayanan, H. 2003. “In Search of Shelter : The Politics of the Implementation of the Urban Land (Ceiling and Regulation) Act 1976 in Greater Mumbai”, in S. Patel and J. Masselos (eds.), Bombay and Mumbai : The City in Transition, Noida : Oxford University Press India.
- Times of India. 1983a. “Belated wisdom”, 7 January.
- Times of India. 1983b. “Surplus land for builders under fire”, 22 July.
- Times of India. 1984. “Deora promises to help tenants”, 14 December.
- Times of India. 2007. “Hiranandanis accused of land-use violations”, 29 December.
