Delhi Slum Rehab Plan 2047: High-Rises, More Saleable Space to Attract Developers

New Delhi: Delhi is looking to overhaul its approach to slum rehabilitation by offering private developers greater commercial incentives under the proposed Master Plan for Delhi (MPD)-2047.

Under the draft plan, developers involved in slum rehabilitation projects will be allowed to construct high-rise buildings with a higher Floor Area Ratio (FAR), while also being permitted to use a larger share of the project land for commercial development and sale.

The changes are intended to address one of the biggest challenges facing Delhi’s slum rehabilitation programme: the lack of interest from private developers.

The existing public-private partnership (PPP) model was designed to allow developers to construct homes for eligible slum dwellers on part of a project site while commercially developing the remaining portion of the land. The profits from the commercial component are expected to help developers recover the cost of constructing rehabilitation housing.

However, despite the availability of potentially valuable land in several parts of the national capital, the model has struggled to attract sufficient private participation.

The proposed MPD-2047 seeks to change that equation by allowing more construction and increasing the portion of land available for commercial sale.

New eligibility rules for slum rehabilitation

The proposed changes come shortly after the Delhi Assembly passed amendments to the Delhi Urban Shelter Improvement Board (DUSIB) Act.

The amendments widened the eligibility criteria for rehabilitation and extended the cut-off date by 10 years.

Under the revised criteria, people living in units that existed on or before January 1, 2025, would become eligible for rehabilitation.

This effectively expands the pool of slum residents who can qualify for rehabilitation housing.

The broader eligibility framework is significant because Delhi has a large number of slum and JJ clusters spread across different parts of the city.

There are approximately 750 slums in Delhi.

Around half of these are located on land owned by Union government agencies, including the Railways, the Land and Development Office and the Delhi Development Authority (DDA).

The DDA acts as the nodal agency for rehabilitation of slums located on its land.

The remaining slums are located on Delhi government land, where the Delhi Urban Shelter Improvement Board (DUSIB) is the nodal agency under the Urban Development Department.

Why rehabilitation has been slow

Despite years of policy efforts, the pace of in-situ slum rehabilitation in Delhi has remained slow.

So far, only two major in-situ rehabilitation projects — in Ashok Vihar and Kalkaji — have been completed.

Both projects were developed by the DDA and together have provided around 4,700 flats.

The limited progress has highlighted the difficulties involved in redeveloping densely populated informal settlements, particularly when private developers are expected to participate.

Under the PPP model, developers are responsible for constructing rehabilitation homes for eligible residents on part of the site.

The remaining land can then be commercially developed and sold.

The underlying idea is relatively straightforward: the developer uses revenue from the sale of commercial or free-sale property to recover the cost of constructing rehabilitation flats.

This model is particularly relevant in Delhi because many slum clusters are located on land that can have considerable real-estate value.

However, developers have faced several challenges.

Small land parcels, difficult site conditions, proximity to drains and railway tracks, and ongoing litigation have all affected the attractiveness of such projects.

Previous tenders issued by the DDA for PPP-based rehabilitation have therefore received a lukewarm response.

MPD-2047 offers higher construction potential

The proposed Master Plan for Delhi 2047 attempts to make these projects financially more attractive by increasing the permitted construction density.

The Floor Area Ratio (FAR) for both the rehabilitation and commercial components has been increased to 500.

Under the earlier draft of MPD-2041 and the existing MPD-2021 framework, the residential component had an FAR of 400, while the commercial component had an FAR of 300.

FAR determines how much total floor area can be constructed on a particular piece of land.

A higher FAR therefore allows developers to construct more floor space, either through larger buildings, additional floors or a combination of both.

The proposed increase to 500 represents a substantial increase in development potential.

This is particularly important for high-value urban land, where greater construction capacity can significantly change the financial viability of a project.

Commercial share increases from 40% to 60%

The proposed plan also changes the balance between rehabilitation and commercially saleable development.

Earlier, developers could use 40% of the land for commercial sale, while at least 60% had to be used for rehabilitation.

Under the new proposal, the commercial component can rise to 60%, while the minimum share allocated for rehabilitation falls to 40%.

The government’s argument is that the additional commercial potential will make projects more financially attractive to private developers.

A DDA official said the earlier policy had failed to generate sufficient developer interest and that allowing greater construction was intended to encourage participation.

At the same time, the official maintained that the new framework would protect the interests of eligible slum residents.

Rehabilitation at the same site remains the preference

The proposed framework provides that eligible beneficiaries should be accommodated at the same site wherever possible.

If this cannot be achieved, residents may be shifted to other feasible locations.

The policy also recognises that not every slum site is suitable for conventional in-situ redevelopment.

Some locations may be physically or financially unviable because of density restrictions, land configuration, infrastructure limitations or high redevelopment costs.

For such sites, the plan allows residents to be relocated to available Economically Weaker Section (EWS) housing stock or other slum rehabilitation schemes.

There is also a separate option for clusters where relocation is considered undesirable or impractical.

In those cases, authorities can pursue in-situ upgradation and area improvement rather than completely reconstructing the settlement.

Such projects can focus on basic urban services, improved infrastructure, disaster resilience and better living conditions.

This creates three broad approaches: redevelopment at the existing site, relocation where redevelopment is not viable, and improvement of the existing settlement where reconstruction or relocation is not suitable.

Centre pushes Delhi to speed up projects

The push to accelerate slum rehabilitation has also received support from the Centre.

In June, Union Home Minister Amit Shah directed the DDA and DUSIB to issue tenders for five JJ clusters within 45 days.

He also directed the agencies to prepare project documents and tender forms for another 50 JJ clusters.

The directions underline the pressure on Delhi authorities to move beyond policy announcements and begin implementing rehabilitation projects on a much larger scale.

The proposed changes in MPD-2047 are therefore part of a broader effort to increase the pace of redevelopment.

The challenge of balancing rehabilitation and profit

The revised model, however, also raises questions about how Delhi will balance the interests of developers with those of slum residents.

The central premise of the PPP model is that private developers can generate enough profit from commercial development to finance rehabilitation housing.

Increasing the commercial share from 40% to 60% and raising the FAR to 500 significantly strengthens that incentive.

At the same time, the success of the programme will depend on ensuring that eligible residents actually receive adequate housing and that rehabilitation does not result in the loss of access to essential services, employment opportunities and community networks.

The proposed plan says all eligible beneficiaries should be accommodated at the same site wherever feasible, while providing alternative options where on-site rehabilitation is not possible.

The practical implementation of these provisions will therefore be crucial.

What the new model could mean for Delhi

Delhi’s slum rehabilitation programme has struggled for years because of the complex combination of land ownership, legal disputes, high construction costs, difficult sites and limited private-sector participation.

The MPD-2047 proposal attempts to address one part of the problem by making projects more commercially attractive.

Higher FAR means more construction capacity, while a larger commercial component gives developers greater potential to recover their investment and generate profits.

For the government, the expectation is that private-sector participation will accelerate the redevelopment of long-pending slum clusters.

For residents, the intended benefit is access to formal housing and improved urban services.

But the success of the policy will ultimately depend on implementation.

The government will need to ensure that redevelopment projects actually reach eligible residents, that promised rehabilitation housing is delivered, and that commercial development does not overshadow the primary objective of providing better living conditions.

Delhi’s proposed Master Plan 2047 therefore represents a significant attempt to redesign the economics of slum rehabilitation.

By allowing taller buildings, increasing FAR and expanding the commercially saleable component, authorities hope to transform projects that were previously unattractive to developers into financially viable redevelopment opportunities.

Whether the new incentives are enough to bring private developers back into Delhi’s slum rehabilitation programme will become clearer as tenders are issued and projects begin to take shape.

For a city facing continuing pressure on land, housing and infrastructure, the outcome could have a major impact on how Delhi approaches informal settlements and affordable housing over the coming decades.