There are few cities in the world where the situation on real estate is as bad as Bombay. Prices are sky-high and the quality of facilities is poor. Andy Mukherjee has a fascinating article on Bloomberg about this, where he says:
Draw a circle with a radius that takes in 25 kilometers (15 miles) from the middle of Mumbai's financial district. Sea and water account for two-thirds of the surface area of this circle, compared with 22 percent for Jakarta and 5 percent for Seoul, according to Alain Bertaud, a Glen Rock, New Jersey-based urban- planning consultant for the World Bank.
All major world cities where the geography restricts the availability of land tend to make up for it by growing tall. That's where Mumbai is an exception. Planners confronted a constrained city and flattened it.
The tool they used to create a stunted city is the floor space index, or FSI, which measures how much saleable area a builder is allowed to create on a parcel of land. A higher reading means taller buildings. The index, which ranges from 5 to 15 in most Asian cities, stands at a measly 1.33 in downtown Mumbai. In the suburbs, the figure drops to 1.
A sprawling city is easier to manage. Small piles of garbage, spread across the city, can be left to rot for longer than would be possible if the trash accumulated in large, stinking heaps. More importantly, when the municipality keeps floor-area restrictions tight, it has power over developers. This power can easily translate into bribes.
Global banks, brokerages and successful Indian companies are all jostling for rentable space in dilapidated buildings, which should have been torn down and built anew a long time ago.
The reason these eyesores still exist is because they were built before 1964 when the permitted floor space index was 4.5. Today, if a developer were to buy the land to erect a new building, he would lose most of the marketable area....
The supply of land has to rise to contain housing price escalation as well as to lower office rents, which are the third- highest in the Asia-Pacific region after Hong Kong and Tokyo.
That would require a repeal of the Urban Land Ceiling Act, a law that has ended up promoting what it was supposed to prevent: hoarding of real estate.
The time for half measures is over.
A floor-area index reading of at least 5 is required across Mumbai.
Mumbai needs to rise from the ground. The question is whether civic authorities will have the will and the ability to cope with the peculiar demands of a tall city.