Brownfield development in Mumbai and Rotterdam, dealing with similar challenges

Dharavi on a Sunday

Mumbai is preparing to renew Dharavi. A highly populated, vibrant, self-built neighborhood, known for its craftsmanship in recycling, leather, pottery and fabric. The urban plan shows similarities with the inimitable street pattern of the medina in Marrakech. You walk along a busy road lined with street vendors, then turn left, and once more left, and suddenly the space tightens. Light from the sky barely reaches the ground, as houses are built extremely close to one another. A typical house consists of at least three storeys and integrates work, living and sleeping and space to rent out to generate extra income.

Walking through the neighborhood on a Sunday, cricket matches take place everywhere in the streets. Kites hover above the bridge near one of the two train stations. Many people are working, even on a Sunday. One pottery oven still releases black smoke, while another is slowly cooling down. Some one million people live and work here, on 2,6 km². This includes some geese, goats, as well as rats.

In this article I invite you on a trip to Dharavi in Mumbai ánd to Schiehaven-North in Rotterdam. We cross continents to explore how both these brownfields (existing neighborhoods) are being renewed and which challenges come along with that. With the aim to ignite dialogue and raise awareness on how we create the value of truly livable and happy neighborhoods. The article revolves around the present values of a neighborhood, the temptation of a blank canvas, the squeeze of ambitions in prevailing financial models and the extension of time horizons and the need for ownership.

The weight of the word ‘slum’

Now I tell you, for those who don’t now know: Dharavi is referred to as a slum. I do not know what your idea of a slum is. But my image sure did not match what I encountered while walking around. I had imagined more chaos, more tent-like structures, more desperation. Yet this was, unmistakably, a full-grown neighborhood. Yes, it was dirtier than other parts of Mumbai. Yes, houses were stacked tightly on top of one another. Electricity wires formed dense webs in very narrow alleys. And yes, working conditions did not appear ideal. I don’t want to romanticize things. But you must agree: had I started by saying this neighborhood is referred to as a slum, notably one of the largest in Asia, your perception would already have been shaped. The label precedes the lived reality.

Custom made handbag by Wahaj Khan near Wadi Ground, Dharavi

Mumbai’s future image

This neighborhood lies at the heart of Mumbai. It is well connected within the infrastructural grid of both public transport and road traffic. It is close to an emerging neighborhood subject to gentrification: Bandra. There, specialty coffee places already number over twenty. No further explanation is needed.

Mumbai is booming. Within a rapid development, the approach to clear and clean what is referred to as the slum gained new momentum. And Dharavi has an excellent position in the fabric of the city. The blue cloth on top of the roofs, typical for self-built houses, is not how Mumbai images its future.

Across continents: unexpected similarities between Rotterdam and Mumbai

Looking across continents, it is easy to point out the differences between a neighborhood referred to as a slum and a neighborhood in Rotterdam, the Netherlands. Yet it turns out that the similarities are greater than one might expect.

Let me introduce a neighborhood in Rotterdam: Delfshaven. For the past decades Rotterdam has been a city that has used the bombardments of a war in 1940 and the developments of one of the largest ports in the world to constantly re-shape itself. It is often referred to as the architecture capital of the Netherlands, with a dense population of designers. Here, on the west side of the city along the river Maas, an old quay with former port sheds, a few other buildings, and a large open space with some sports fields is on the verge of being developed into a Paris-proof quarter: Schiehaven North. At present, the area is windy, largely empty, and dominated by concrete and the water of the river Maas. The sports fields bring life to one end of the site, motorcycle lessons take place in the middle area, while the sheds have evolved into one of those unintended urban fringe developments where start-up organizations generate value through their work. And every now and then the area is used as a fairground.

At first glance, this could not be more different from Dharavi. Yet teams on both sides of the world are confronted with remarkably similar questions, characteristic to brownfield renewals:

What is in the memorandum of principles?

In Dharavi, many houses are already marked to be demolished and replaced by apartment buildings and green space. Detailed plans have not yet been published. However, Dharavi’s current economy depends on a tightly interwoven network of workshops and companies functioning as an end-to-end production system.

The government has committed to providing new housing for many households. But the typical interwoven character of the economic heart of Dharavi is not explicitly addressed in the memorandum of principles as can be read in public documents. My estimate is that it is precisely this economy that generates the vibrancy in Dharavi. Even if one rightly seeks improved living and working conditions, something of great value is lost if this economic fabric cannot be translated into the renewed neighborhood.

Let us return to Rotterdam. The quai once neglected, is now mainly animated by sheds-use and the temporary occupation of a former office building. These uses create an atmosphere of beginning anew. New companies emerge, forming an ecosystem that will soon result in a monthly public programed event. This process unfolds bottom-up, enabled by low costs, and it creates value for the city.

But what will happen when designers start working on a masterplan? Is the ecosystem worth integrating in the new development? Will the port sheds, because of their poor condition, be placed on the demolishment list? The city, as owner of the land, has not taken a standpoint regarding the ecosystem.

The challenge is the same in Dharavi and Schiehaven: create housing for many on a small, already occupied site with present social and spatial value.

House in Dharavi, nominated for demolishment

The temptation of a blank canvas

In urban renewal the temptation of large-scale demolition and starting anew is never far away. Designing on a blank canvas is easier. A brownfield is complex. Existing sheds, self-built houses, economic networks, trees, and buildings constrain design freedom and increase costs. Worldwide we have a design-task to tackle the complexity of brownfields. And I challenge the paradigm of demolition-new construction. It is refuted by the universal law of creation that invites us to always build upon appreciation for what already exists. Working without this appreciation means that everything must be rebuilt, not only the physical environment. This takes years to complete, mainly because a neighborhood consists of both hardware and software.

Put differently: the design of a neighborhood is, by definition, a combination of top-down choices and bottom-up development, whether this is acknowledged or not. Residents do co-create the urban environment in the use phase. They co-create or re-create and with that develop a neighborhood into an interesting environment. Acknowledging this allows it to be used as an asset in creating a livable, happy neighborhood.

Another perspective on the same issue is resilience, now central in urbanism. One of its key characteristics is diversity: diversity of people, buildings, facilities, and public space. Diversity evolves far more easily by adding new elements to an existing fabric in co-creation with residents than by developing apartment buildings with standard floor plans and predefined square meters of commercial space.

Finally, without even taking a sustainability standpoint, common sense applies: there are currently so many brownfields that we simply cannot endlessly demolish and rebuild them every 50 years. The waste of material would be enormous.

At its core, renewing a neighborhood means unpacking, deepening, and widening the complexity that is already present. And adding new insights and freshness. And carefully demolishing what truly is in too poor condition or in no way suitable for today’s and tomorrow’s urban life.

Financial logics vs. ambitions

Turning to the financial dimension of both developments, any description remains indirect at this point in time, as figures are not public and many uncertainties persist due to the early stage of the development. In Rotterdam, the municipality intends to sell the land to various developers. The city bears the costs of preparation, both in planning and on site. These costs are incorporated into a business case. Land prices are calculated using a residual method: market value of housing minus building costs. Ideally, this leads to municipal income, which can be used for other developments in the city. High ambitions increase building costs and reduce yield. Similarly, complex site preparation due to existing structures raises expenses. Still, mainstream thinking insists that the business case must be positive and land sales must generate income.

So, the ambition for this neighborhood Schiehaven-North is to become Paris-proof, alongside nine other ambitions. These are outlined in the Area Ambition Document adopted by the City Council, which now forms the basis for a masterplan and urban design. Paris-proof entails a state-of-the-art integration of sustainability insights. In general, sustainable building requires higher initial investment, leading to lower maintenance costs and greater durability during the use phase.

In Rotterdam’s financial reality, when the city requires sustainability ambitions, the building costs increase, reducing the outcome of the residual land-value calculation. It is therefore no coincidence that the document states: we build Paris-proof, unless…

Mumbai, or the Maharashtra regional government, faces a different ambition in in its attempt to ‘clean up’ the parts of Dharavi referred to as slums. Because present housing is largely self-built and work is organized close to home, offering the households new housing introduces a fundamental dilemma. Maintenance costs or rent per household will increase, while income is put at risk as existing networks of work and production are disrupted. In the past, this has resulted in newly built housing that deteriorated rapidly due to a loss of income among residents. It is often said that residents chose to sell or rent out their new homes and construct another dwelling elsewhere, once again in informal settlements. This cycle has forced the city of Mumbai to search for creative solutions to prevent the repeated loss of public investment.

Property and ownership

The fundamental issue in real estate lies in short time horizons: governments seek income quickly, developers seek rapid profit, while urban environment and their buildings endure for decades or centuries. Why extract profit swiftly? Extending the horizon of involvement allows continued responsibility for neighborhood and buildings, while they could still generate yield. It is simply a different model.

It can be traced back to a struggle with the same underlying paradigm. Housing worldwide has become primarily an investment asset, rather than a living environment. In my view, both cities are prey to this paradigm that is not serving society. There is a crucial difference between property and ownership. Property reduces housing and land to a tradable product. Many real estate developers see land and buildings as property. Ownership is something completely different. With ownership comes responsibility, some love and care. People don’t live in property; they live in environments shaped by care. So we are in desperate need of ownership to contribute to happy neighborhoods.

Boomeranging cost for government

This brings me to looking at the role of the government, whether city (Rotterdam) or region (Maharashtra). In a world dominated by free market-preferences, its role has narrowed to setting ambitions and mitigating the most harmful effects. Yet an unpleasant reality accompanies this limited role. Ultimately, government is the one and only party that feels responsibility for society as a whole. Whenever the market fails, costs boomerang back to government, whether in banking systems or neighborhoods. When a system that should serve all falls apart, everybody looks at the government: why don’t you care for your people? By then, developers have already realized their profits.

This simple truth demands a fundamental reconsideration of how governments invest in cities and collaborate with market parties. This is not a plea to exclude the market, but a call for greater intelligence and care in ensuring that the general interest is genuinely served.

Expanding time horizons

Maharashtra government’s approach is striking, as can be read in formal documents used in the bidding process and the establishment of a shared entity. In the case of Dharavi, a different approach was chosen. A Special Purpose Vehicle was created with the Adani Group, the developer that won the bid: Navbharat. The government holds a stake of 20% in Navbharat. Integrated in the agreements is the requirement that operations, maintenance and security for a period of 10 years remain the responsibility of the developer. This avoids a hit-and-run approach and increases ownership of the neighborhood even after housing construction is completed. Maharashtra government expands the time horizon with this set-up.

By retaining a stake in the development, the city keeps a finger on the pulse, aiming to prevent the renewed neighborhood from being abandoned before it has had the chance to mature. The role of the government is primarily controlling, with the intention of steering Dharavi’s future in a more favorable direction.

At first glance, again, this approach may seem irrelevant to Rotterdam. Yet a closer look reveals the similarities. The city of Rotterdam has reached the simple yet groundbreaking conclusion that while it can facilitate the construction of a Paris-proof neighborhood, construction is only one phase. Meaningful and lasting change occurs during the use phase of the neighborhood. So, they are also looking at a completely different way to extend the time horizon.

Cautiously, an experiment has begun: the Schiehaven Citizens. This initiative is endorsed by a project developer TBI/ERA Contour which holds a development claim in the area. One might ask whether TBI’s steward-owned company structure instilled more ownership thinking rather than purely property thinking in their genes. What is the idea of these Citizens? The current parties in the eco-system of the area and a party accelerating housing cooperations in Rotterdam are formally organizing themselves as future users and residents. The ambition is to close the gap between development, build and use of the area, and with that extend the time horizon. For both the developer and the city this is highly unusual. Although in The Netherlands there is a strong tradition of participation processes in city developments, this is different.

Here these Schiehaven Citizens will claim a formal position in the development process. Let me underline the value of this approach in practical terms. There is, for example, an idea to create some m2 communal space in every future apartment building. But who will feel ownership of this space? Is the space adequate for its users, or will it immediately require remodeling? Or another example: the current eco-system can already provide on-the-ground services, such as regenerating soil to prepare it for future nature. Excluding this option, will result in the city later paying a landscaping company to do the same with new materials and at a higher cost. And final example: public green space may be beautifully designed, but again the question arises: who will feel ownership for this? A neighborhood with high sustainability standards requires ownership and not passive consumerism. And this ownership must be woven in the development phase.

The quay in Rotterdam on an event day

Through organized messiness, towards more livable neighborhoods

Schiehaven North and Dharavi will continue to develop over the coming years. I will observe these processes from the front row, being a member of Schiehaven Citizens and through research into an extensive case study of Dharavi.

It goes without saying that  I see great value in genuinely building upon (appreciation of) the value an existing neighborhood already holds; this should be an extensive part of the analysis phase when creating a future plan. And I fully acknowledge that this leads to greater complexity, more messiness and less control. Therefore, it may be advisable to create a future plan that combines clear and suitable ambitions with strong organizational and process structure running through both development and execution phase. This allows for another form of control: the ability to adapt to what emerges on the ground and to unexpected ownership opportunities.

Another issue I touched upon is the risk that government must re-invest in a neighborhood when an earlier renewal failed to deliver. Mumbai’s approach makes sense: extending both the period and the scope of responsibility for a market actor.While unfamiliar, even further extending the connection between developer and neighborhood is compelling. Profit would then stem not only from sales, but from a combination of sales and ground lease. The key difference lies in the time horizon, even though this requires a fundamental shift in thinking and business models within real estate.

It cannot be that, even with good intentions, we create neighborhoods where consumerism thrives and government alone picks up the pieces. We all want a livable neighborhood; this is no rocket science. I welcome continued dialogue to consciously evolve the renewal of our brown fields towards greater livability.