Real Estate in India: the emergence of new growth Centers Pivoting the Focus towards Sustainability
“Cities have the capability of providing something for everybody, only because, and only when, they are created by everybody.” – Jane Jacobs
Jane Jacobs, one of the 20th century’s leading urbanists and a lifelong advocate for truly inclusive communities, summed up the need for human-centric, broad-based urbanisation, where growth and opportunities are not limited to a few major centers, in this bucolic quote. This is especially relevant for a vast nation like ours, where modern urbanization started as a need to satisfy colonialist goals, leading to the emergence of megacities like Mumbai, Kolkata, and Chennai, which attracted the majority of growth and opportunities, often at the expense of the surrounding hinterlands.
However, things are improving rapidly. Over the past few years, from 8-lane roads to dedicated freight routes, holistic, inclusive, and empowering infrastructure has made growth more linear, with the focus now shifting to tier-2 and tier-3 areas. Real estate is following suit, creating a nationwide pipeline of thriving urban communities.
Today, Tier-2 and Tier-3 cities—once considered “backward”—drive urbanization. A significant movement of key growth clusters, whether in manufacturing or outsourcing, from the “metros” to places like Patna, Kanpur, Bhopal, Indore, Coimbatore, Bhubaneshwar, and Guwahati, among others, has increased demand for housing, commercial, and retail spaces, accompanied by significant infrastructural progress, from better roads to a widespread proliferation of urban and rapid transit networks. This has enabled these cities to become important real estate investment players, garnering considerable attention from India’s top developers.
This growth can be welcomed or not, depending on your perspective. My view is simple: a new digital India can’t prosper on the backs of a few over-pressured metropolitan centers with fundamental public utilities falling down. What happened in Delhi with the creation of a large NCR clustered around it, enabling a more equitable spread of the growth dividend across some of India’s most populous regions, needs to be replicated and elevated by creating broad super-regions that are interconnected at all levels, from people to ideas and data.
Tier 2 and 3 real estate expansion can also alleviate the increasing prices in several of our major cities. In one of my earlier writings, I discussed the need to redefine space to control excessively high home price inflation. I’d want to add that if demand constraints in the cities are reduced, prices will naturally fall. In a city like Mumbai, if we can divert even a small percentage of incoming migrant traffic to lesser developed cities like Nashik or Nagpur through policies that facilitate a more spread-out development canvas, house prices will drop and slum growth and the rise of illegal settlements and communities will definitely slow down.
Many say that this rapid urbanization and the real-estate boom are not conducive to a sustainable, planet-sensitive ecosystem. Over the years, concerns about forest cover and food security have grown as farmland and forestry lands have depleted rapidly. I disagree with this premise because the current urbanization trend doesn’t need to mimic the past. Real estate expansion in a city like Agra may start from scratch, which is intriguing. Agra or Bhopal can create urban communities that are open, clean, inclusive, diverse, sustainable, green, and self-sufficient for everything from urban farming to green energy without either copying Mumbai or Delhi. Such places can be built to have a lot of greenery, and rural spaces can be naturally integrated into it to maintain a certain continuum of farming land.
In conclusion, real estate expansion in a new India must reflect the reality of a society where every citizen can mature and flourish. All stakeholders should support the rise of tier 2 and 3 cities as engines of progress and development.
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