Slumdog real estate moguls

India’s rising economic stature has brought millions of its citizens into the ranks of the middle class. It seems another boom is on for some of Mumbai’s poorest residents as a result of a large spike in real estate prices.

The New York Times‘ India Ink blog had a story today about the sudden paper wealth that has come to many of the residents of the Dharavi, Mumbai, Asia’s largest slum. Dharavi, featured in the 2009 Oscar winning film, Slumdog Millionaire, came into the global spotlight following the film’s critical and commercial success.  The last areas of growth within Mumbai now lie within Dharavi, which was built on a former mangrove swamp. The article detailed the unique set of circumstances facing the residents:

Her 200-square-foot shanty, in Rajiv Gandhi Nagar, in the Dharavi neighborhood of Mumbai, has faulty electrical lines, no water supply and a non existent sewage system. Still, Ms. Vaidya’s house is her most prized possession. "If I decide to sell it, it will fetch me more than Rs 10 lakh" rupees, or about $24,000, she estimates, based on the offers she has been getting.

Ms. Vaidya isn’t alone. Many of Mumbai’s slum dwellers, some 60 percent of the city’s 21 million people, are living in hovels that suddenly command high prices.

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"Shanties as small as 120 square feet, located on the 90 Foot Road that is perpendicular to the Bandra Kurla Link Road, are as expensive as $93,000," says Dinesh Prabhu, who owns a construction company and has conducted an extensive survey of Dharavi real-estate prices. The 90 Foot Road has commercial outlets spilling out onto the streets, frequent cattle blockages, and old worn-out buildings just behind the shanties.

The National Geographic covered a story several years ago about life in the slum, including its complex economy which featured recycling, liquor distilling and plastic production. A new conflict is brewing between the government and private companies, who are attempting to redevelop the highly lucrative land, and residents who see it as a threat to their way of life. Further threats from scam artists and shady real state agents selling fake identification papers will only serve to complicate the situation further.

In the past, India’s poorest have faced neglect from corrupt officials, and shoddy state planning which has failed to alleviate the gripping poverty in their lives. Efforts such as the National Identification Scheme, run by Nandan Nilekani, to give agency to the poorest may be the solution to creating wealth and improving the lives of millions.