Informal Housing Markets and Redevelopment - A Case Study of Dharavi Frida Granbom Emeli Ljunghusen 1 Copyright © Frida Granbom & Emeli Ljunghusen Division of Construction Management Faculty of Engineering, Lund University Printed in Sweden by Media-Tryck, Lund 2011 ISRN LUTVDG/TVBP-5421 Department of Construction Sciences Telephone: +46 46 222 74 21 Faculty of Engineering Telefax: +46 46 222 44 14 Lund University E-mail: [email protected] P.O. Box 118 Webpage: http://www.byggvetenskaper.lth.se SE-221 00 Lund Sweden 2 Informal Housing Markets and Redevelopment - A Case Study of Dharavi Preface During our academic years at the Faculty of Engineering, Lund University, we have obtained fundamental knowledge regarding property related economics, law and technology. Throughout the education, we subsequently became interested in the subject of development of land and cities. As both of us are internationally oriented, we saw the possibility to deepen our knowledge by focusing on an international matter in our master thesis. We are grateful to SIDA for providing the economic grant that made this research and the journey to India possible. We would also like to thank our supervisor Stefan Olander, Associate Professor at the Division of Construction Management, Lund University, for giving valuable support and advice throughout the course of research. The time spent in Dharavi, Mumbai during our case study has been very intense and at times difficult, but foremost interesting and rewarding. We have obtained many significant experiences, which we would not have been able to gain from a desk in Sweden. For this we would like to thank field experts for sharing their thoughts and the inhabitants of Dharavi for their time and hospitality upon inviting us into their homes and sharing their life stories. We are especially grateful towards Venkatesh Ganesh, our interpreter and later friend, who in excess of case study related matters has shared personal thoughts and experiences, hence giving us a deeper understanding of the society of Dharavi. We are equally grateful to Ramchandra “Bhau” Korde, who also has shared his personal experiences and mentored us through difficulties. Without the help of Mr. Bhau, this thesis would not have turned out the same. We would also like to thank our families and friends who have supported our work as well as given essential feedback. Last but not least, we would like to thank each other for an excellent collaboration and a well performed master thesis. Lund, March 2011 Frida Granbom and Emeli Ljunghusen 3 Master Thesis Title: Informal Housing Markets and Redevelopment -A Case Study of Dharavi Authors: Frida Granbom and Emeli Ljunghusen Department: Division of Construction Management, Faculty of Engineering, Lund University, Sweden Supervisor: Stefan Olander, PhD, Faculty of Engineering, Lund University, Sweden Language: English Keywords Property development, Informal settlement, Slum, Dharavi, Upgrading, Housing market, Rental housing, Informality, Squatting, Redevelopment, Land use, Property rights, Property value 4 Informal Housing Markets and Redevelopment - A Case Study of Dharavi Abstract World-wide, the population is increasing rapidly and so is the number of people residing informally. Hence the development of slums is increasingly becoming a rising problem. Consequently, the need to acknowledge the issue and to find sufficient solutions has enlarged. The informal settlement of Dharavi is facing a redevelopment and it is of importance to survey and analyse the current situation. Dharavi consists of an area that represents many informal settlements and its development is at present at an interesting stage, suitable for this research. By studying Dharavi useful information can be obtained and later applied to other areas and future redevelopment projects. There is an apparent lack of documented knowledge regarding the impact of slum redevelopment. In particular, this shortcoming concerns informal housing markets. The main purpose of this research was to acquire knowledge regarding the process of property development in informal settlements and to identify how such development would affect existing housing and rental markets. The purpose was fulfilled by conducting a case study and a complementary literature study. During the case study, information was mainly gathered through qualitative open-ended interviews with Dharavi inhabitants as well as local field experts. It has been found that a number of aspects regarding informal communities are affected upon redevelopment. Some of the most substantial changes concern the informal housing market, where juridical and financial changes are to be expected. Consequently, there are some positive as well as negative outcomes of such redevelopment. The major positive outcomes are improved housing standards and the creation of a healthier environment. The negative outcomes concern the likelihood of remaining in the area, the difficulties to retain a livelihood and thus the risk of new slum formation elsewhere. 5 6 Informal Housing Markets and Redevelopment - A Case Study of Dharavi Table of Contents Preface ............................................................................................................................................. 3 Keywords ..................................................................................................................................... 4 Abstract ....................................................................................................................................... 5 1. Introduction........................................................................................................................ 13 1.1 Background ............................................................................................................................ 13 1.2 Research aim and objectives ................................................................................................. 13 1.3 Limitations ............................................................................................................................. 13 1.4 Target audience ..................................................................................................................... 14 1.5 Outline of the report ............................................................................................................. 14 2. Methodology ...................................................................................................................... 17 2.1 Scientific research ................................................................................................................. 17 2.1.1 Methodology and technique for scientific studies ........................................................ 17 2.2 Information retrieval ............................................................................................................. 18 2.2.1 Literature study ............................................................................................................. 18 2.2.2 Interviews and questionnaires ...................................................................................... 18 2.2.3 Case study ...................................................................................................................... 19 2.3 Applied method ..................................................................................................................... 20 2.3.1 Selection of methods ..................................................................................................... 20 2.3.2 Selection of case study .................................................................................................. 20 2.3.3 Selection within the case study ..................................................................................... 21 2.4 Research methods in practice ............................................................................................... 21 2.4.1 Standardized open-ended interviews ........................................................................... 21 3. The phenomenon of slum .................................................................................................... 27 3.1 World-wide slums .................................................................................................................. 27 3.2 Defining slum ......................................................................................................................... 27 3.3 Forces shaping slums ............................................................................................................. 29 3.3.1 Governmental policies ................................................................................................... 29 3.3.2 Poverty .......................................................................................................................... 30 3.3.3 In-migration ................................................................................................................... 30 3.3.4 Lack of economic growth .............................................................................................. 31 4. Housing in slums ................................................................................................................. 33 4.1 Tenure ................................................................................................................................... 33 4.2 Informal housing and lack of tenure security .......................................................................