In situ redevelopment of slums in Indian cities: Closing a rent gap?

Cities of the Global South are often unable to invest in developing urban housing. Land value-based tools for developing low-income housing, like India’s In Situ Slum Redevelopment (ISSR, part of the Pradhan Mantri Awas Yojana—Urban scheme), seek to balance welfare and economic agendas, but have not achieved expected results. ISSR’s focus on attracting private capital to redevelop India’s slums reflects a perceived rent gap on slum lands. This paper dissects this perception using a probabilistic simulation model to assess the scheme’s feasibility and profitability, integrating data on slums, real-estate markets and policy incentives. The paper proposes a Land Shape Index, identifying slum land shape as a critical—and overlooked—determinant of rent gap. Finding little to no rent gap on slum lands across big and small cities—reflected in ISSR’s low uptake—the paper argues that land value-based capital-led slum redevelopment is unlikely to gain traction and scale. These analyses provide avenues for policy introspection, practice, and lessons for housing studies in India and beyond.