If property values are any indicator, access to high quality public transit is highly desired in Mumbai.
The city’s developers are cashing in on proposed infrastructure projects, even though the completion of these projects could be years away. After recent announcements of planned transportation investments, developers started boosting the prices of flats close to mega projects, assuming new transit will be a big selling point.
This is coming as a surprise to some house hunters. One apartment seeker, Ananya Shekdar, was caught off guard when a Wadala developer showed her the map of his residential building plans, emphasizing the site’s proximity to upcoming projects like the trans-harbor link, the Metro rail and the Monorail.
Some view these price increases as profiteering, but developers counter that buyers have been showing a lot of interest in the infrastructure projects. They want to be close to transit alternatives and less congested areas. Ultimately, access to these amenities will increase their bargaining power when they resell their flats.
The Mumbai Metropolitan Regional Development Authority seems to recognize the value of land close to transit as well. It is now inviting bids – starting at 50,000 rupees ($1,096) per square meter – for a parcel of land in Wadala that will be connected with the southern parts of the city by the Monorail and will also house an interstate bus terminal. The land is slated for offices, shops, hotels, entertainment, sports facilities or homes.
Though consumers may not like the higher land prices, in some sense, this phenomenon is a positive sign. Rising property values near transport amenities mean that having access to those services is highly desirable. The population is showing its preference for proximity to quality transportation, and developers are simply responding with higher rents. However, it is important that the wealthy are not the only ones who can exercise that preference. Transportation investments must serve the needs of the entire population.
The government should respond to this market signal in several ways. It must recognize the widespread desire for better transit and provide more of it. Bringing demand more level with supply will cause prices to lower and ensure that more people have access to transportation amenities. Additionally, the government can invest in multi-modal transportation that caters to all needs and income levels. These options range from safe bicycling infrastructure to rail transit. And in order to implement a comprehensive, high quality and connective transportation system, the government must spend its money wisely, focusing on modes that bring the most benefit for their investment.