Vertical cities are pro-poor

Written by Kala Seetharam Sridhar | Updated: Dec 12 2011, 07:00am hrs
In his recent book on the triumph of the city, Edward Glaeser looks at the importance of urban life to business and innovation and suggests the most important investment in any city is human capital. In recent research, I find that the most important determinant affecting positively a citys economic output is human capital, as measured by the literacy rate of its population, taking the case of Indian cities.

While a large planned socialist economy such as India is characterised by strong land use controls such as the Urban Land Ceiling and Regulation Act, the Rent Control Act and unduly restrictive floor-area ratios or Floor Size Index (FSI) restrictions, why is this important for a citys growth There is very little empirical evidence as to whether or not these land use controls have had the desired effects on city planning and attracting population. Floor area ratio being the ratio of built area to land area, an FSI of 2, for instance, allows a building an area of floor space equal to twice the area of the plot (including those on multiple storeys) on which it is built. Indias cities are characterised by extremely low maximum FAR/FSI.

In most large cities around the world, the FSI varies from 5 to 15 (in lower and mid-Manhattan, New York) in the city center, to about 0.5, or below, in the suburbs. In most large cities of the world, as technology and infrastructure improve, the FAR (FSI) in the city center tends to increase. However, contrary to international evidence, Indias cities have extremely low maximum FAR, in the center of cities, which I have found to be on average 2.43 (for residential purposes), based on data from more than 100 cities throughout India. Bangalores current master plan allows a maximum FAR of about 2.50 (permitted for residential purposes), with Chennai allowing the maximum FAR of 4.13 (for non-residential uses). The maximum FAR I have found based on my research on Indian cities is in the cities of Kerala, where the maximum permissible (residential) permitted FAR/FSI anywhere in the city is 4.

The result of unduly low FAR restrictions is that the supply of built land is restricted, and the price per unit of built area is bid up. The extraordinarily low FSI in Mumbai and other Indian cities has led to an artificial increase in rents per square foot and land prices that have unfavourably impacted the urban poor who have had to consume lower floor area space (which is 2.3 square meters of floor space per person in Mumbai and the lowest anywhere in the world, as documented by previous researchers). The consumption of floor space per capita in Mumbai is extraordinarily low, when compared with cities internationally (see Figure 1). In Bangalore, it is estimated that consumer loss from FSI restrictions (same as FAR) represents 3-6% of household consumption. Further, Mumbai also has some of the lowest proportion of its population living within 10 km of its central business district (Figure 2). This is one reason why we find more than 50% of Mumbais population lives in slums.

City planners argue that existing infrastructure in developing countries is insufficient and so higher densities (presumably brought about by a higher FAR) cannot be absorbed. However, usually with an increase in FAR, the population or employment density tends to actually decrease. While this might seem counterintuitive, this happens because an increase in FSI is associated with an increase in floor space per person and per job. More floor space is built on the same unit of land, but people and enterprises consume more of it, so population and/or employment density tends to decrease. Of course, the infrastructure will have to be redesigned and rebuilt in the areas where a large FSI increase is projected.

Most cities of the world have a policy to increase FSI with time. The progressive increase in FSI has two purposes: first, it allows households and firms to consume more floor space as their incomes increase without having to move to new areas in the suburbs; and second, an increase in FSI contributes to a decrease in the city spatial expansion (or suburbanisation), decreasing population dispersion, transport costs and pollution due to transport. Without higher FAR, real estate projects are also usually not financially feasible. Because of decreasing FARs (as has happened in Mumbai in the past), few buildings get renovated and cities are left with lots of redundant space.

If one has to think of making Mumbai a Shanghai, Shanghai in1984 had a floor area per person of 3.65 square metres. Shanghais municipality, at the time, considered that rapidly increasing floor consumption was the citys first priority. In 2003, the average floor space consumption in Shanghai was 13.1 square metres per person. This was achieved in part by drastically increasing the FSI there. Mumbai recently increased its FSI to 3 (May 2011).

While Indian cities have gradually increased their FAR/FSI, this debate needs to be revisited to develop better planned cities for future urban growth in this country.

The author is with Public Affairs Centre, Bangalore. Views are personal