In this article Jitendra N Bajpai, Adjunct Faculty at Columbia University, New York, and a former Director of the World Bank, takes a broad historical look at the forces that have shaped the planning and designing of New York City from being a small port city in the early 19th century to its present state. He draws lessons for India and envisions a foundation for smart cities.
The Modi government’s intent to build 100 smart cities reflects the high priority it attaches to the role of the urban economy in nurturing India’s future growth and improving living conditions in its cities. The available data shows that by 2030, the country will add 250 million new urban residents and its cities will account for almost 70% of India’s GDP. Urban India, will probably find it difficult to keep pace with this kind of change as it continues to reel under pressure to provide affordable housing, basic services and amenities, connectivity and a pollution free environment.
The spatial footprints of Indian cities and their evolution over time expose the failures in land management. With organic expansion and inadequate services, citizens are experiencing long commute to work, proliferation of slums and steady deterioration of living and environmental conditions. Fast growing cities are regularly encountering severe conflicts with their peri-urban jurisdictions over issues of land acquisition, industrial decentralisation, water resource depletion, urban waste disposal, contamination of soil and aquifers, and participation in the policy process (Narain V, Anand P and Banerjee P, 2013). Due to limited financial resources most cities are struggling to meet the increasing demand for even basic services. Under such conditions what kind of smart cities should India aspire to develop, that will support prosperity and healthy living for its residents? And what will make our cities smart?
To find an answer, I looked at my phone and wondered why it is called a smartphone. About six years back, it was simply a cell or mobile phone. It got a new name once it started to offer features that served needs of common users besides enabling communication – internet, camera, clock, voice recording, news and many specialised applications. These increasing smart features were built over a period of time on a foundation of the mobile communications technology. Taking the smartphone analogy, a smart city must have, or build the basic foundation that will promote its economic vision with necessary amenities and services for its residents and businesses.
Transformation of an Island of Hills
The history of today’s well-run cities may offer an answer. A historical search highlights the nature and timing of appropriate actions taken by past leaders of a city over time and how those actions served as the foundation for smart development. Being a resident of Manhattan (New York City), an island city known for its vitality and efficiency, I began to explore the kind of development path it took from a small port city of 32.2 thousand residents in 1790 to the current population of 8.4 million. The city transformed an organic pattern of growth to a grid-based development following the 1811 Commissioner’s Plan (Ballon H, 2012). The rectilinear plan of blocks (200 by 610 to 920 ft.) with north-south avenues and east-west streets was designed to accommodate a sevenfold increase in land area. But the original city population grew twentyfold by 1900. Such an unprecedented population rise was mainly triggered by the influx of mostly poor migrants from Europe, and the increased access to the port city from the hinterland with the opening of the Erie Canal and later with the expansion of railroad in the Eastern part of United States of America.
To prepare the 1811 Plan, a three-member Common Council including a Surveyor, John Rendell, was appointed by Governor Morris. Only State Legislatures had the power to approve any changes to the plan while the New York City decided to build new street openings. To assess the value of land parcels and properties, a three-member Commission of Estimate and Assessment was established. A Real Estate Exchange facilitated auctions and record keeping of public and private land parcels and properties. The grid expansion adopted a self-financing scheme to build the road system and to compensate private land and property owners affected by it. Street opening costs were recovered from a frontage fee imposed on the land parcels that were facing the street. Later it was replaced by the property tax. Economic growth and opening of streets continued to increase property values and related taxes, which grew from $25 million in 1807 to $1.25 billion by 1887. Over a period of 60 years, the landscape of Manhattan known as the “island of hills” was steadily transformed from a two-dimension (2D) grid of road system into a three-dimension (3D) city of two- to three- storied buildings.
The New York City transformed an organic pattern of growth to a grid-based development following the 1811 Commissioner’s Plan. The rectilinear plan of blocks with north-south avenues and east-west streets was designed to accommodate a sevenfold increase in land area. But the original city population grew twenty-fold by 1900.
The grid plan served as the foundation for economic and spatial development. But it came under criticism for not accommodating nature and open spaces particularly after the yellow fever outbreak of 1822. The need for altering the grid gained momentum. A blend of public and private interests was mobilised to create neighbourhood parks and the famous Central Park opened in 1860. The landowners surrounding the parks benefitted with the rise in their property values and so did the city with the increased property tax revenues. The erosion of the grid continued to create more public squares, recreation facilities, markets and civic centres such as libraries and concert halls. With the technological advancement in the late 19th Century, the skyline of Manhattan started replacing its two- three- storied buildings with skyscrapers, while the grid accommodated underground utilities, increasing number of cars and subways.
Due to increasing concerns about density, shadows of skyscrapers, congestion and reducing open spaces, the first zoning law was introduced in 1916. The law prescribed permissible building heights, plot coverage and setbacks. By 1961, floor bonuses were offered to landowners to create new public spaces. New York’s city zoning constantly evolved in response to its changing economy, related real estate market demand and emerging safety and environmental concerns.
Since the grid was failing to adequately serve north-south travel, two private subway lines opened in 1908. The city opened another new subway line to expand services to outskirts which became home for inner city poor migrants and at the same time, reduced overcrowding of the island. By 1953, all subway lines were brought under a public corporation. Over time, one of the largest subways of the world was built to support the grid that today serves 4.5 million daily riders. New Yorkers continue to enjoy walking due to strict provision of sidewalk rule (10 to 19 ft. wide sidewalks depending upon street widths) and bike riding due to the provision of 200 mile bike lane.
To sustain economic vitality, New York City continues to redefine its vision in order to support its development strategies. For instance, the present efforts are directed to grow technology and information industries for a long-term economic health. The City has won accolades for many of its sustainability actions including carbon emission reductions, building resilience against natural disasters, job growth, parks and greening and new real estate developments. The emergence and expanding use of IT has added the fourth dimension (4D) of virtual public. Today e-governance and information about civic services are available to its residents on their laptops and smartphones.
Building Blocks of Smart Cities
The history of New York City, as for all cities, is unique. Perhaps it is not relevant to the Indian urban situation. But it does provide a few broad lessons which are generic in nature and may serve as building blocks of city planning and management in India. The New York story illustrates how an initial grid based system serving the anticipated land expansion evolved over time, but continued to reinforce a foundation for city development. Its success largely depended on appropriate institutions for planning, financing, execution and participatory process.
To sustain economic vitality, New York City continues to redefine its vision in order to support its development strategies. For instance, the present efforts are directed to grow technology and information industries for a long-term economic health. The City has won accolades for many of its sustainability actions including carbon emission reductions, building resilience against natural disasters, job growth, parks and greening and new real estate developments.
Defining Smart Path at Planning Stage
Planning begins by defining a city’s long-term vision. An assessment of strengths, challenges and opportunities helps to shape the economic dimension of that vision. The vision must reflect the views of key stakeholders including the public agencies, private sector, civic actors and neighbourhood organisations. An inclusive planning process translates the vision into a set of time-bound doable, affordable and rational actions that address the key issues of each city’s productivity, inclusiveness and resilience. The anticipated demographic changes and development determine the urban expansion needs considering environmental and topographic constraints.
Pursuant to the State Town Planning Acts, Master Plans – a high-cost technical document prescribing land usage and density – have been prepared for over 2000 Indian towns. But many of these plans have not been implemented due to lack of local resources and support. The rationale for these plans diverged from the realities. The proposed land regulations under these plans, in particular the Floor Space Index (FSI) to control building heights (ratio of built space to plot areas), have been restrictive and less responsive to location-specific market demands. Most cities have maintained low FSI levels. They are almost one-fifth to one-tenth of other cities in the world (Bertaud A, 2004). As a result, the Indian cities provide for less floor space per unit land area compared to the city level demand particularly in central areas and near highly accessible transport and employment nodes. Over a longer period, the increasing gap between floor space supply and demand raises property prices causing overcrowding (less space consumption per capita) and slum formations by those who fail to afford a shelter. The process also encourages outward growth for those in search of lower cost housing and/or more living space but willing to incur higher commuting costs. It is definitely not an efficient land development policy. Low-income residents who move to outer areas are disproportionately affected by increased transport expenditures and reduced access to city-wide jobs and amenities.
For fast growing cities, the projected urban expansion often extends beyond their present political boundary. In such cases the need to extend a city’s political boundary or to create a coordinating framework across local bodies, such as a metropolitan authority, becomes essential. But only a few large Indian cities (e.g., Mumbai Metropolitan Regional Development Authority, MMRDA) have so far established a metropolitan agency.
In brief, to nurture a smart path of land development the current urban planning practices must be more flexible and responsive to evolving city specific real estate market and socio-economic contexts. It should replace the top down prepared twenty-year document which does not regularly evolve over its life. Instead of seeking suggestions and concerns post preparation, the process of preparation itself could be made more inclusive with relevant stakeholders in strategy formulation, adopting regulations and standards, monitoring results and raising local and private finances. This way a twenty-year macro-level master plan (or development plan) offers a broad framework for physical development within which real estate markets can competitively operate and government interventions can address issues of market failures (e.g., non-availability of affordable housing, infrastructure deficiencies and environmental concerns). The micro level plans (local area plans or zonal plans) accompanying the macro plan can capture the smaller area specific needs of the market, infrastructure and basic amenities, and may demand changes to the macro plan’s regulatory framework and investment priorities. Thus, the aim should be to establish a collaborative, dynamic, result-oriented and fiscally affordable city development process.
In brief, to nurture a smart path of land development the current urban planning practices must be more flexible and responsive to evolving city specific real estate market and socio-economic contexts. It should replace the top down prepared twenty-year document which does not regularly evolve over its life.The process of preparation itself could be made more inclusive with relevant stakeholders in strategy formulation, adopting regulations and standards, monitoring results and raising local and private finances.
Build a Foundation of Connected Spaces
Due to the failure of the traditional master planning process, political interferences and availability of limited finances and skills (e.g., urban planners, engineers, economists and real-estate market analysts) to manage local development, Indian cities experience, disjointed and poorly served developments. Such a trend of land development remains inefficient and unhealthy. And often it gives rise to numerous conflicts with the surrounding local settlements.
The grid has been an integral element of planning history and can be found in most Spanish and North and South American cities (Pedro, 2013) and even in some Indian subcontinent cities (e.g., Mohenjo-daro and Chandigarh). Planners find grid based urban expansion an effective way to enhance connectivity, mobility and accessibility. It easily adapts to 3D creativity in terms of mix and density of land usages resulting from improved access and land value of sites. Moreover, it is considered ideal for delivering transit and other utility services. For road users, it increases routing options, direct connectivity, and biking and walking possibilities. Thus, a well-designed grid with adequate public transport services can reduce the use of private motorised modes and related congestion, accidents and carbon emission. But critics are also right when they say that the grids serve only real estate interest and do little about aesthetics and hardly meet the socio-cultural and open space needs of people. A finer grid can lead to too much space allocation for roads.
Therefore, the sole purpose of a foundation for city growth, either a grid based or any other form, is to guide orderly and well-connected urban expansion. Such a development plan maintains a balance between land supply and demand, thus causing greater fluidity in the real estate market and reductions in speculative behaviour. Since local land owners will benefit from such an approach they are likely to become active participants in the city’s development process. A city consequently would create the right conditions for the development of affordable housing, particularly for low-income families and for the decongestion of the overcrowded city core.
The old paradigm of top-down planning process to control land use and density deserves to be replaced by smart incentive based mechanisms (e.g., FSIs, transfer of development rights (permission to build more than the level permitted) and tax exemptions for meeting specific public purposes like supplying low cost housing or public amenities or promoting land pooling, etc. to channel private investments in real estate development while addressing social, civic and environmental concerns.
Manage Land for Financing and Sustainability
Land being one of the main inputs to nurture economies of agglomeration, cities must manage it well not only as a primary local source of revenue, but also to minimise negative externalities linked to land use such as congestion, pollution, safety and crime. A study of 36 Indian cities (Mathur O M, Thakur D and Rajyadhaksha N, 2009) suggests that on an average per capita property tax yield (excluding almost 24% in arrears) of municipal corporations is just about Re 1per day and represents around 28% of municipal revenues. Thus, the potential for enhancing urban property tax collection in Indian cities is enormous if cities improve formal count of properties to be taxed, enforcement of tax collection and their property evaluation and indexation system. Between 1991 and 2001 Bangalore had increased its property tax revenue by 33% due to the improvements in its collection rate and number of assessed properties, introduction to a new property value evaluation method and adoption of IT tools for property record keeping (e.g., GIS) and tax billing. Thus, an improved property tax regime holds great promise for generating local finances for new urban infrastructure and services by capturing increases in land values that emanate from improved public services. But to build an efficient land and property based financing mechanism, a city must have an independent property registration and valuation system. In this regard, the experiences of West Bengal Central Valuation Board may prove to be valuable.
Since a private land market is likely to be more efficient, than government, in deciding the timing and location of land use and densities, the role of the city government and its planners should be to analyse the market signals and ensure that private development meets the necessary safety and environmental regulations. The regulatory tools like FSI (built area to plot ratio) should not be treated as an entitlement for specific use or user groups but an allowable maximum in identified areas (e.g., transit nodes, high land value areas, overcrowded districts, etc.) which could be developed by property owners/developers over the plan period. But such a market-responsive approach will require regular monitoring of real estate market and correction of land market failures if any, to minimise negative impact of failures on the three key dimensions of a city – economy, liveability (e.g., availability of affordable housing, traffic congestion, overcrowding, health and safety) and equity (distributive effect on population groups). As mentioned before, the old paradigm of top-down planning process to control land use and density deserves to be replaced by smart incentive based mechanisms (e.g., FSIs, transfer of development rights (permission to build more than the level permitted) and tax exemptions for meeting specific public purposes like supplying low cost housing or public amenities or promoting land pooling, etc. to channel private investments in real estate development while addressing social, civic and environmental concerns. By increasing fluidity in the property development market, a city will also enhance its property based tax revenues.
Adapt to Changes
The smartness of a city will thus depend on how well it prepares its two-dimensional foundation of land development to serve its economic vision, manage its transformation into the third dimension (skylines) and adapt to dynamics of changes including new technologies (fourth virtual dimension) to better serve its residents and economic stakeholders.
The future of a city depends on today’s vision, but translating this vision into reality requires multigenerational support, appropriate institutions, collaboration across city service agencies and levels of government and public officials with open mind for adopting innovative solutions and practices. In this respect once again the recent experience of New York City in planning and implementation of its long-range sustainability plan, PlaNYC, highlights relevant lessons.
The New York story simply offers a few relevant lessons from the history of its transformation since 1811. But the Indian cities must discover their own context-specific, affordable and doable actions. The emerging technologies of the 21st Century aim to enhance efficient resource use (water, energy, material and eco-services) and information flows for connectivity, effective governance and broader opportunities for all. Cities have the opportunity to leapfrog and embrace new technologies and proven good practices from other cities to promote their sustainability objectives. They can adapt a new paradigm of infrastructure planning which minimises loss of energy and enhances resilience by building synergies across various urban services (e.g., green infrastructure, parks and playgrounds for storm management, energy capture from wastes for home heating or to run buses) and co-location of infrastructure facilities to reduce the use of valuable urban land (e.g., combined projects of recreational uses and water or waste water treatment plants). Similarly, adoption of new tools such as a GIS platform by city agencies will enable the integration of spatial and non-spatial data for planning, monitoring and decision- making by local bodies/institutions and enable relevant public discourse. But the application and effectiveness of all the above will be compromised in the absence of a basic foundation of well-connected city growth.
The future of a city depends on today’s vision, but translating this vision into reality requires multi-generational support, appropriate institutions, collaboration across city service agencies and levels of government and public officials with open mind for adopting innovative solutions and practices. In this respect once again the recent experience of New York City in planning and implementation of its long-range sustainability plan, PlaNYC, highlights relevant lessons. It illustrates the effective way Mayor Bloomberg’s office managed and coordinated the preparation of an action-oriented plan, sought best practice advice and guidance from outside experts and community leaders, adopted an effective outreach, stayed open to innovations and moved quickly from planning to action (ICLEI, 2010).
I hope Indian cities will be empowered to pursue their vision as envisaged under the 74th Constitution Amendment, and be fiscally empowered as well to generate local revenues for building a smart foundation for their urban development while remaining accountable to local voters in meeting their needs. An empowered and well-governed city will only be able to break the silos of sector service agencies and parastatal organisations, and bring them together in realising its vision for smart development. But to sustain momentum towards the agreed vision and allow for mid-course corrections they will need an inclusive and citizen-centric planning and execution regime. And finally the quality of city leadership will matter the most to build smart cities.
Bertaud A (2004): The Perfect Storm: the four factors restricting the construction of new floor space in Mumbai; http://alain-bertaud.com/AB_Files/AB_Mumbai_FSI_FAR_conundrum.pdf
Hillary Ballon, ed. (2012): The Greatest Grid: The Master Plan of Manhattan 1811-2011, Jan. 3
ICLEI (2010): The Process Behind PlanNYC, ICLEI (USA), Dec. 2010
Mathur O P, Thakur D and Rajyadhaksha N (2009): Urban Property Tax Potential in India, National Institute for Public Finance and Policy, New Delhi, July 2009
Narain V, Anand P and Banerjee P (2013): Periurbanisation in India – A review of the literature and evidence, SaciWaters, India
Ortiz P (2013): The Art of Shaping the Metropolis, McGraw Hills, Dec. 2013
Key Words: Smart cities, urban expansion, master planning, grid plan, Manhattan, property tax