In 2009, for the first time in human history, more people lived in cities than in villages. This urbanization has been celebrated due to the associated rapid rise in productivity and thereby GDP growth, particularly, in the case of China and South Korea. However, there have been instances of urbanization without growth, such as in Brazil and certain African countries, where the quality of opportunities in cities, rather than the number of people, determine economic development. Decent housing and supporting urban infrastructure are fundamental drivers of improving quality of life. In 2011, 377 million people (31% of the total population) in India lived in cities, but of these, 65 million (27% of the urban population) lived in extreme shelter poverty in areas called slums. This challenge is not unique to India, 863 million people around the world live in similar squatter settlements3. India and China have the highest number of slum dwellers, with 50 million plus inhabitants living in acute shelter poverty. The United Nations’ Sustainable Development Goals recognize the sustainable growth of future generations is contingent upon active improvement in quality of life. The Sustainable Development Goals aspire to halve the proportion of people living in slums within each country by 2030. Given the very nature of informality, surveying the number of households defined as slums is challenging, but in India, this implies improving the quality of life of at least 6 million households.

Yet, India has a more ambitious target in mind; the government recently announced the Housing for All policy which aims to provide every citizen access to adequate housing by 2022. It is estimated that the current shortfall of houses is 19 million, with 95% of this need being in the low-income segment (less than ₹2,00,000)4. This cannot be achieved by government interventions alone, hence the government has articulated its policy of incentivizing the private sector to participate in the effective redevelopment of the entire slum community. The slum redevelopment component of this scheme proposes an efficient solution: the government aims to use land occupied by squatter settlements as a resource to subsidize housing for the urban poor. This effectively solves the problems of land shortage while subsidizing the cost of housing for the urban poor to as little as zero in some cases.