The plight of satellite towns in India

July 11, 2012 / By

A close look at the residential construction activity happening in and around India’s top-tier cities reveals that suburbs and satellite towns bear a herculean load of meeting the housing demand. Time and again, I have noticed that these outgrowths of cities like Mumbai, Delhi, Chennai, Bangalore and Kolkata, etc., provide three to five times the number of houses as compared to their parent cities.

Every year, when the Mumbai Metropolitan Region constructs about 24,000 houses, Mumbai City builds 1,000 houses, her suburbs build about 5,000 and the remaining 18,000 are constructed in her satellite towns of Thane and Navi Mumbai. Chennai constructs about 18,000 houses annually, of which only 3,000 are in the city limits, while a whopping 15,000 are in the suburbs and satellite towns.

Housing construction on the outskirts of India’s metros begins well before the necessary infrastructure has been constructed. This happens because demand for houses in big cities is high enough to make even hastily established projects financially feasible for developers.

The main reason for this is affordability. The absorption of affordably priced projects is literally guaranteed, no matter what the drawbacks of the location are, and the land prices are much lower than they are in areas closer to city centres. Often the peri- urban council bodies lack resources as well as vision and willingness to implement such structures.

Many satellite towns are poorly equipped to handle the relentless demand to properly facilitate their jurisdictions. While they realise the problem and may have done much planning, we have seen little implementation on the ground.

Also, city municipal corporations have to work together with the state government, which results in bureaucratic disconnect and the involvement of multiple agencies. Sourcing funds generally means creating public-private partnerships, and local agencies are not always empowered or experienced enough to do so.

Their plight is the same everywhere
Meanwhile, most areas in the far suburbs continue to suffer from a lack of proper roads, water, electricity, sewage systems, public transport, hospitals and schools, etc. Moreover, many of these areas do not have strong economic drivers to encourage the implementation of infrastructure projects. These drivers exist mainly in their parent cities. These areas serve solely as residential bases for those who cannot afford to live closer to their workplaces in the more centralised locations.

Precautions and Remedies
Because the demand is so high, end-users are forced to overlook the lack of infrastructure and move in regardless of the inconveniences they will face afterwards. However, residential property buyers whose circumstances require them to seek properties in these less-enabled locations can still ensure that the necessary infrastructure exists, at least at the project level.

The city agencies should be innovative and use market dynamics to raise and deploy funds for infrastructure. Much can be learned from the Ahmedabad Urban Development Authority (AUDA). The AUDA model is built around acquiring a large tract of land, enabling infrastructure on it and returning this part of the property to the owners as developed land that has immediate market value. In return, they retain the remaining portion for further development of their own projects.

As the conventional revenue sources for satellite city agencies are drying up, they must wake up and act proactively to stop the haphazard growth propelled by the market forces and offer an enhanced standard of living and quality of life to the vast majority of the people who create wealth in parent cities for its fewer and more privileged citizens.

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