Linkages between Densities and Housing Supply: Case of Mumbai

It has become quite an accepted interpretation that higher buildings and more density allows more affordable housing. In economic terms, Glaeser’s thesis argues for more high rise buildings to overcome the affordability of housing by increasing the elasticity of supply and removing constraints on the building heights. In this context, the paper uncovers the impact of density led regulations and policies on the net housing market supply and availability of affordable housing through empirical evidence. The city of Mumbai offers a unique window into the correlations between housing supply and densities. The city allows, in certain circumstances, the development potential of a plot of land to be separated from the land itself and be made available to the owner in the form of Transferable Development Rights. These Rights (TDR) are utilized as commodities that can be traded in the market to be added as extra built up in upcoming projects, the costs of which are linked to the value of land. The city of Mumbai has long been criticized for its dependence on using density regulations and its trade as the primary planning mechanism of housing delivery. Amidst a skewed supply of housing units in the city, where unaffordability is widespread, such mechanisms are accused of creating supplementary markets of density trading leading to a scarcity of housing units. Through the use of GIS and data driven analysis of the newly created (2016) Real Estate Regulation Authority’s (India) large dataset of housing projects, the study exposes the spatial flows and patterns of density and housing units across the city. As more construction density is being consumed by ever fewer people, the research demonstrates the geographic signature of the competing aims of policy viz., Decongestion of the city versus Adequate housing.