Celebrations are galore in a small village on the outskirts of Sangli, Maharashtra. Everybody is rejoicing in the return of the prodigal son, Satish Gaikwad. Unable to hold a job in the village, Satish was sent away in 1998 to Mumbai to look for work. After twenty five years in the city, he now returns a millionaire, having made more money than anybody else in the village. After the evening festivities, they gather around him and probe, "What's the secret to your success?". With a smug smile he answers, "Slum redevelopment".

You see, when Satish first came to Mumbai he struggled to find work and a place to live. He eventually took up a job as a driver and found accommodation in a suburban slum. A few years down the line, the slum he lived in went in for redevelopment. Having lived there for a considerable time and owing to the prevalent laws, Satish became eligible for free housing. In 2013, Satish became the proud owner of 1 RHK flat in Mumbai. Ten years later when it was time to retire, he was able to fetch a cool 10 million rupees or 1 crore rupees for his rehab flat. He, like several others living in the slum, made his fortune in the city not only through gainful employment but also through real estate.

The word 'slum' was first used in the 1820s in London to describe localities with deplorable living conditions. In colonial times, it implied a class division based on one's residency. Today, the word 'slum' is broadly used to describe any illegal and unauthorised settlement of individuals in urban areas. In most countries, squatters or slum dwellers develop legal rights to the land they occupy over time. These rights were created to protect the poor and destitute. However, today they have been misused and manipulated by middlemen to create an underbelly of slumlords that exploit the system while perpetuating the cycle of poverty.

In 1971, the Maharashtra Slums Areas (improvement clearance and redevelopment) Act legally recognised slums, making basic amenities such as water and sanitation available to its dwellers. In 1995, the state government introduced the Slum Rehabilitation Authority, paving the way for private participation in the rehabilitation and redevelopment of slums. To date, over 2,50,000 permanent tenements have been handed over through SRA projects alone. Under the current laws, inhabitants of slums that have existed pre-2000 are eligible for free housing while inhabitants of slums created between 2000 and 2011 can purchase permanent homes, through redevelopment projects, for as little as 2.5 lakh rupees.

Over the last thirty years real estate has boomed in India. Most cities have witnessed a steady growth in housing prices, with land prices skyrocketing in some. Meanwhile, salaries have not kept pace with rising prices and taxes making it progressively harder to own a home. As a result, the average 1 BHK has shrunk from 600 square feet to 380 square feet. On the other hand, rehab tenements have grown from 180 square feet to 300-350 square feet.

In December 2023, the Maharashtra government passed a bill allowing slum dwellers in Mumbai to sell their allotted flats within five years, down from ten years. This means, that once a flat is allotted to an individual as a result of illegally occupied government land, he or she then has the liberty to sell the allotted home for a profit and seek residence elsewhere. Most rehab tenements are built in-situ, in prime localities where the market value can be as high as INR 50,000/- per square foot.

In 2021, SRA conducted a surveyed of 86,429 tenements and found that over 10,000 tenements were being illegally occupied. According to recent reports, over 8,000 acres of government land in Mumbai is said to be illegally occupied by slums. Slum redevelopment schemes, though well intended, has created a skewed environment for the average taxpayer. Instead of curbing illegal encroachment and the proliferation of slums, it has incentivised certain individuals to misuse the system for their benefit.

Urban planners must consider the creation of affordable housing as seriously as other infrastructural needs such as water, electricity and sanitation. Without adequate housing, cities will struggle to cope with a constant influx of people. Migrants should have access to safe and hygienic living quarters, without having to rely on slumlords for shelter. Subsides and incentives offered should not create a parallel system where illegal encroachers thrive while hard-working taxpayers struggle to afford homes. Development in the truest sense will only come about when everybody in the nation benefits.

India is one of the fastest-growing nations in the world. With an estimated growth rate of 6.5-7 per cent, experts anticipate we will be the third-largest economy by 2030. Real estate is the backbone of development in every nation. It provides the built environment needed by industries to flourish and expand. While development creates more job opportunities, it also increases the need for affordable real estate in areas that offer these opportunities.