Land Value Capture from Post-Industrial Redevelopments of Inner-City Areas

The nature of rapid development witnessed by Greater Mumbai post economic liberalization in India, its manifestation in real estate development and physical maturation of the inner-city areas is described in the study. The financial gains viz-a-viz who pockets, who pays and who benefits lies at the crux of the research. This thesis approaches the subject of value capture from large redevelopments in inner-cities, from a costs and benefits point of view. The motivation to carry out his research was triggered by the interest and need that the author felt to look at the redevelopments projects from a financial point of view as against the social and environmental perspective that has been discussed upon time and time again; also because in a fast growing economy like India, local governments are constantly devising mechanisms to increase financial independence. Hence, the monetary benefits and losses that policy changes engender are demonstrated in the study. The decline of the cotton textile industry and the closure of the mills opened the large land for redevelopment in the heart of the city. The four project cases were thus chosen from amongst these defunct cotton textile mill lands. The main objective of this research was to study the potential of the existing, legally binding value capture mechanisms, and further asses if they have been designed to mitigate the impacts of the redevelopment process. This research is framed in three different analytical parts. The first looks at theories of land rent that explain how value is created, the land value practices described introduce the nature of mechanisms adopted to capture this value hence justifying their potential benefits to public authorities. The second section analyses the cases selected by further examining the potential value creation, realization and the value captured thereof. This financial assessment is then undergoes a comparative analysis in the third section by the findings with the help of defined indicators prove the changes in land value trends and hence the need for redevelopment. This section also demonstrates the potential value created, the role and share of primary actors namely the private developers and landowners and the Municipal corporation of Greater Mumbai. One of the primary findings suggest that the potential value created on account of public sector intervention far exceeds the captured value. However the study also suggests that the mechanisms adopted sketch an irregular graph specific to each case, in-terms of the success to mitigate physical impacts of the redevelopment process. The final chapter of the study compares the findings to argue that the mitigation of impacts from value capture practices in Mumbai is inconsistent because of the in-tangency of the tools for different land-uses and different stakeholders depending on the degree of benefits created. This section finally summarizes the primary concern of who pockets, who pays and ultimately who benefits from the redevelopment process.