In this report published by Brookings India, IDFC Institute Junior Fellow Vaidehi Tandel and alumni Sahil Gandhi, Alex Tabarrok, and Shamika Ravi examine a major factor contributing to supply side constraints in Mumbai's urban land market – the relationship between real estate construction delays and litigation.
"India is urbanising and putting increasing pressure on urban land and there is growing impetus to convert land from agriculture to non-agriculture use. According to the United Nations (2015), India will see the largest increase of all countries in urban population by 2050. Efficient functioning of urban land markets will be critical to ensure decent quality of living. The incremental urban population in India is being accommodated through redevelopment within cities and expansion around city peripheries (Angel et al. 2010, Angel et al. 2011a, Angel et al. 2011b, Chandrashekar and Sharma 2015, Shrigaonkar 2016).
Both processes depend on availability of adequate land and rules governing land use and development. It is well known that formal urban land markets have remained unresponsive to housing needs in India (Bertaud and Bruckner 2004, Brueckner and Sridhar 2012, Annez et al. 2010, Bertaud 2014). This has led to a rise in informal housing or slums (Bertaud 2014). Around 17 percent of India’s urban population lives in slums with Mumbai having 42 percent of its population in slums.
Indian cities are known to have some of the most stringent urban land regulations, which affect housing supply elasticities. This paper looks at a major factor contributing to supply side constraints in the urban market, the relationship between construction delays and litigation. The paper also adds to the literature on the real estate sector and developers in urban India."
Read the full report here.