No one dares to play forced demolition in India

  Developers dare not forcibly demolish slums, and neither does the government. Although these slum owners are at the bottom of society, they hold the “Sword of Shangfang” that makes politicians afraid – votes.
  People in Shanghai and Beijing who are sighing at the high housing prices can only be intimidated when they come to Mumbai and New Delhi in India.
  A small building with an area of ​​about 1,000 square meters in Banjor district, southern Mumbai, sold for US$4 million in the 1990s and now has skyrocketed to US$50 million. A small apartment on the fifth floor next to the small building has an area of ​​300 square meters. According to the owner, since he bought it in 1975, the market price has risen 600 times to 360 million rupees (about 7.3 million US dollars).
  A survey shows that in 2010, Mumbai ranked tenth on the list of the world’s most expensive house prices, with a unit price of about US$9,000 per square meter. The city’s annual per capita income that year was only $900. In contrast, the seventh-ranked Paris has a unit price of about 12,000 US dollars and an annual per capita income of 37,000 US dollars.
  Behind India’s high housing prices is its social system. The Constitution of India stipulates that all citizens have the right to move freely within the territory of India, and to reside and settle in any place. This means that an Indian, no matter where he goes, enjoys the same civil rights as the residents in the locality: equal rights in job search, children’s education, medical treatment, etc.; no health certificate, temporary residence permit, and no shelter. At the same time, Indian law also stipulates that as long as a piece of land is used continuously for 10 years, the ownership of the land is automatically obtained.
  Since the 1960s, more and more Indian peasants have moved into the city to live on random plots, and the slums have grown and formed. Although the slums are famous for piles of garbage, poor sanitary conditions, lack of public toilets, and security problems, when developers or the government propose to demolish or buy land, the owners here are not willing.
  ”There are roughly two reasons: first, the renovation will destroy the existing livelihoods of these people, and their handicraft workshops, garbage collection stations, small shops and other industries cannot be placed in the apartments, and they have always depended on it for a living; secondly, Public transport facilities in India, including Mumbai, are still poor, and demolition means they have to move farther to live, which will keep these people away from work,” said Chirag Savia, assistant general manager of a property developer.
  But forced demolition will not work here, developers dare not demolish slums, and neither does the government. In India, developers and the government are almost always the ones who lose the lawsuit when faced with demolition issues. This is the gospel of the lower classes, and India is also called “the poor man’s paradise”. Although these slum owners are at the bottom of society, they hold the “Sword of Shangfang” that makes politicians afraid, that is, votes. In every Indian general election or local election, the huge number of slum voters is a powerful political force that any politician would dare not ignore.
  Moreover, India implements private ownership of land, and the government does not have much say in this issue. “The government itself does not have a surplus of land (it only holds about 30% of the land, and in big cities such as Mumbai and New Delhi, the proportion will be lower), the biggest reason why many infrastructure constructions cannot be carried out smoothly is that the government does not have available The land cannot be forcibly requisitioned.” said Ravi Sathe, who works in a consulting firm. Therefore, in this country where land resources are scarce, especially in cities, how to obtain land is a thorny problem that real estate developers must face.
  Real estate is a highly profitable industry in India. As you can see from the 2010 edition of Forbes India’s Rich List, most of the new entrants are from the real estate industry. According to CLSA (Asia) chief economist, there is not much of a bubble in the Indian real estate sector with such high prices and profit margins. He said, “Although property sales in cities such as Mumbai and New Delhi have slowed down significantly in the past two years, there are still 25% to 35% growth in other places. So basically there is no significant contraction in housing demand in India.”
  It is not so easy for ordinary people to invest in real estate in India and wait for the appreciation. Real estate taxes in India are high, and privately owned land, houses, and even trees in the yard are subject to real estate taxes. Transaction taxes and vacancy taxes have also curbed people’s desire to speculate. If you sell your house and don’t buy another house or make other investments for a year, you will pay 33% of all profits. So, Morgan Stanley’s Ridham Desai also doesn’t think there’s a big bubble in the Indian real estate market.