Free apartments in Mumbai, but not everyone is happy

Free apartments in Mumbai, but not everyone is happy - Business - International Herald Tribune: "Under an inventive government program in Mumbai, builders raze entire slum neighborhoods and use part of the land for tenements to house the original residents. The apartments measure 225 square feet, or 21 square meters — the size of a typical shanty. In return, the developer wins the right to build lucrative towers on the rest of the land and pays nothing but the cost of the slum resettlement.

So far, 100,000 such apartments have been built in Mumbai, housing 600,000 people, said Debashish Chakrabarty, a civil servant who runs the city's Slum Rehabilitation Authority.

There are 933 million slum dwellers worldwide, according to the United Nations, and many methods of addressing their plight. A common approach is for a government to sanction slum clearance and then build low-cost housing paid for by the state.

The UN is financing an alternative project to give slum dwellers small loans to improve the quality of their shacks on their own and, after natural disasters, to build new homes.

What makes the Mumbai program unusual is the deployment of profit- seeking investment to build free apartments, said Toshi Noda, the Asia director of the UN Human Settlements Program, also known as UN-Habitat.

Trikona Capital, an investment fund based in New York that focused on Indian real estate, recently said that it would invest $1 billion during the next four years in slum resettlement in Mumbai and in the lucrative construction that follows.

The fund's investors include prominent financial houses like Lehman Brothers and Fidelity Investments. Foreign companies, including ETA- Ascon of Dubai, have expressed serious interest, said Vakil of Knight Frank. Trikona is also considering a bid, which could be in the range of $200 million for each of five plots of 107 acres, or 43 hectares.

So profitable is resettlement that one local developer, Akruti Nirman, has built its entire business around slums, and it is expected to raise $100 million next year in a stock offering that has attracted overseas investors."