The London School of Economics and Political Science The Construction of Mumbai’s Land Market Anitra Baliga A thesis submitted to the Department of Sociology of the London School of Economics and Political Science for the degree of Doctor of Philosophy, London, May 2020 Declaration I certify that the thesis I have presented for examination for the MPhil/PhD degree of the London School of Economics and Political Science is solely my own work other than where I have clearly indicated that it is the work of others (in which case the extent of any work carried out jointly by me and any other person is clearly identified in it). The copyright of this thesis rests with the author. Quotation from it is permitted, provided that full acknowledgement is made. This thesis may not be reproduced without my prior written consent. I warrant that this authorisation does not, to the best of my belief, infringe the rights of any third party. I declare that my thesis consists of 80202 words. Abstract Recent regulatory changes have led to the transformation of Mumbai's real estate industry. Since the liberalization of India's real estate sector in 2005, Mumbai has seen an unprecedented flow of finance capital into the production and sale of new real estate to meet the city's housing needs. The prerequisite for such investments is that land be commoditized, i.e., delinked from its socio- spatial specificities so it can be traded on global financial markets. However, in a context like Mumbai, this is especially difficult because property rights are unclear, and the rules of land development uncertain. Using Mumbai as a case study, this project examines how real estate developers operationalize the imagination of commoditized land, often through narratives of the developmental hero, by describing their work as acts of heroism in a context where development would otherwise be impossible, in order to establish a market for land. An eighteen-month ethnographic study reveals that a new professional class of developers who strive to commodify land against all the odds (as opposed to effectively producing and selling new real estate), has emerged dominant against incumbent and financially responsible development firms in Mumbai. This group's struggle to follow through with the execution of projects has paradoxically resulted in several abandoned projects in the city and driven away financial investors from participating in further real estate production. Table of Contents Introduction 1 1. Mumbai’s Real Estate Paradox 1 2. Researching the Real Estate turn in India 6 3. Theorizing Land Markets from an Economic Sociology perspective 10 4. Research Objective & Design 18 5. Dissertation Structure 22 Methodological Reflections 27 1. Finding a Research Question 27 2. Making Sense of the Field 33 3. Fieldwork Structure 37 4. Challenges Faced 41 Mumbai’s Real Estate Industry 45 1. Mumbai: A City of Contradictions 45 2. Mumbai’s Urban Development 48 3. Liberalization and Its Discontents 52 4. FDI in Indian Real Estate 57 5. Developer Groupings 63 Consent Acquisition 71 1. Introduction 71 2. A Brief History of Slum Redevelopment in Mumbai 73 3. The Case of Dhobi Ghat 76 4. Institutional Framework 86 5. The Coordination Challenge 95 6. Discussion 106 Project Valuation 108 1. Introduction 108 2. Regulations 110 3. Domains of Competition 116 4. Constraints on Valuation Decisions 124 5. (E)valuation in Practice 132 6. Discussion 140 Building Approvals 142 1. Introduction 142 2. A Shifting Regulatory Landscape 144 3. The Fight for Transparency 149 4. Conception of Control 154 5. Hierarchy and Competitive Advantage 159 6. Negotiating Approvals: In Practice 168 7. Discussion 178 Financing of Real Estate Development 181 1. Introduction 181 2. Regulating Real Estate Finance in India 183 3. Contentiousness and Power Struggles 192 4. Rules of Development Finance 198 5. Real Estate Finance: In Practice 202 6. Discussion 212 Conclusion 215 1. The Liberalization Project Derailed 215 2. Obstacles to Market-making 217 3. Practices of Land Development 218 4. The Hero Narrative 228 5. Final Comments 230 Acknowledgements 233 References 234 Annex Annex A: Area calculations for Dhobi Ghat (SRA, 2018) ...................................................................... 261 Annex B: Eligibility count for Dhobi Ghat (SRA, 2018) ......................................................................... 262 Annex C: Density calculations for Dhobi Ghat (SRA, 2018) ................................................................. 262 Annex D: Price trends for Mahalaxmi (Liases Foras, 2018)................................................................ 263 Annex E: Sample IOD (Bombay Municipal Corporation) ..................................................................... 264 Annex F: Interviewee list ................................................................................................................................. 268 List of Figures Figure 1: Heatmap of Mumbai's real estate prices and slum settlements (Compiled by Author; Data: Liases Foras, 2020; Map: kepler.gl) 29 Figure 2: Areal View of Mumbai's housing contrasts (Peter Bialobrzeski, 2018) 46 Figure 3: Pencil Towers in Mumbai's Inner City (Author, 2015) 48 Figure 4: The Island of Bombay and Colaba (British Library Board, Materials Towards a Statistical Account, volume 3, 648 as cited in Riding, 2018, p. 37) 50 Figure 5: Greater Mumbai (Royal Dutch Geographical Society KNAG, as cited in Nijman, 2010, p. 6) 50 Figure 6: FDI Trends across India (Compiled by Author; Data: DIPP, 2019) 60 Figure 7: FDI Comparison for Mumbai (Compiled by Author; Data: DIPP, 2019) 60 Figure 8: Mumbai Real Estate Growth (Compiled by Author; Data: Liases Foras, 2019) 61 Figure 9: Sequence of sorting process 67 Figure 10: Developer Population, Supply Volume, and Supply Value (Compiled by Author; Data: Liases Foras, 2018) 70 Figure 11: Location map of Dhobi Ghat (Source: kepler.gl) 76 Figure 12: Price trends for Mahalaxmi (Liases Foras, 2018) 81 Figure 13: Promotional advertising by Piramal Realty (Author, 2018) 82 Figure 14: Excerpt from the title deed. Monetary transactions between Omkar and Lokhandwala involved exchange of flats and money (MahaRERA, 2019) 84 Figure 15: Excerpt from the title deed. Keemaya was paid INR 50 million (£500,000) by Omkar as compensation (MahaRERA, 2019) 85 Figure 16: Chronology of Dhobi Ghat's redevelopment (Author, 2018) 85 Figure 17: Baboo structures used for drying laundry at Dhobi Ghat (Author, 2017) 87 Figure 18: Comparison of Ready Reckoner and Market rates for Malad, a district in North Mumbai, over 15 years (Compiled by the author; Data: Department of Registration and Stamps, Maharashtra, 2019). 115 Figure 19: Locations analyzed for standard deviation across price, sales and projects (Compiled by Author; Map: kepler.gl) 119 Figure 20: Comparison of the builder groups’ coefficients of variations (Compiled by Author; Data: Liases Foras, 2019). 120 Figure 21: Comparison of Sales Velocity, Launch Price, and Project Count (Compiled by Author; Data: Liases Foras, 2019) 122 Figure 22: Project growth rate of 16 developers shows a linear growth of about 1.62 launches per year (Compiled by Author; Data: Liases Foras, 2019) 123 Figure 23: Promotional Material by Paradigm Reality highlights “commitment” as a virtue (Paradigm Realty, 2019) 134 Figure 24: East Mumbai neighborhoods of Wadala, Chembur, Ghatkopar, Vikhroli, Kanjurmarg, and Mulund (Compiled by Author; Map: kepler.gl) 162 Figure 25: Comparison of IODs. Majority developers received their IOD approval within six months (Compiled by Author; Data: MahaRERA, 2019). 164 Figure 26: Average approval times between different developer groups (Compiled by Author; Data: MahaRERA, 2019) 165 Figure 27: Lokhandwala Minerva and Lodha Bellissimo competing for a view of the Arabian sea (Author, 2015) 172 Figure 28: Excerpt from LOI certificate. Lokhandwala had originally submitted a Letter of Intent (LOI) for developing Minerva in 2005, but re-submitted a revised LOI in 2009 (MahaRERA, 2019) 172 Figure 29: Lodha Bellissimo was launched in December 2005 (Housing.com) 173 Figure 30: Project status of Shreepati Skies. Completion date extended to 2025 (MahaRERA, 2019) 176 Figure 31: Correlation of Omkar’s total supply and total sales from 2008 to 2018 (Liases Foras, 2019) 210 Figure 32: Excerpt from Dhobi Ghat’s title deed. The phrase “flats allotted” appears seven times in the 90-page document (MahaRERA, 2019) 212 List of Tables Table 1: Overview of interviewees ................................................................................................................... 39 Table 2: Type of developers interviewed ...................................................................................................... 40 Table 3: Price to Income Ratio in cities of the world (Numbeo.com) .................................................. 62 Table 4: Filters used to sort developer groups ............................................................................................ 68 Table 5: Simplified Built-up Area Calculations (Compiled by Author, 2018; Data: SRA, 2018) 80 Table 6: Simplified Sale Value Calculations (Compiled by Author, 2018; Data: SRA, 2018; Piramal Realty, 2018) ................................................................................................................................ 81 Table 7: Developers involved in the Dhobi Ghat Redevelopment (Author, 2018) ......................... 86 Table 8: Mean Gradient (project launches per year) and the Standard