The story so far
Housing along with food and
clothing is a basic need of human beings colloquially called as roti, kapda aur
makaan in India. Historically, the evolution of human civilization can be
traced to its quest for better quality of life by securing these 3 basic needs.
Food: The
evolution from being mostly forest dwellers to village dwellers primarily
served the purpose of securing food. Rather than being hunter-gatherer for its
day to day food needs, man was now able to produce and store food for longer
periods. Yet, it is important to note that even after the evolution of villages,
a significant section of the human society continued to be forest dwellers and
a healthy symbiosis emerged among them. The forest dwellers supplied a variety
of raw materials from the forests to the villages and received value-added
produce from the village dwellers in return.
Clothing: As man
continued to evolve, mechanization and mass production of clothing came next.
This also coincided with the evolution from primarily village dwellers to city
dwellers. Now, much smaller number of people was engaged to meet the demand of
clothing.
Housing: As man evolved
further and more hands were freed from meeting food and clothing needs, man
turned its attention to secure its housing needs. Together with advent in
transportation and communication, now durable houses could be built at distant locations. As a
result new cities and towns arose and kept expanding in size to an extent that
by 2006, the number of city dwellers globally crossed the 50% mark and is
expected to cross the 75% mark by 2050 in the business-as-usual scenario.
However, as the above figure
indicates, urbanization puts a heavy burden on our food and health which
essentially require rejuvenation of both forests and villages. The central
challenge and opportunity therefore is to create a healthy
balance among forests, villages and cities. In this scenario, smart cities will
learn to provide a much better quality of life and become hotbeds for creativity
and innovation even as they will occupy much less space and will include plenty
of food production and forestry within city space.
Real Estate 1.0
The evolution of housing in India
gave rise to a new genre of enterprises called the real estate developers that
we shall call as Real Estate 1.0. The big change was that instead of buying
land and building a house on it in a city where only the basic amenities of
water, electricity, sewerage and phone were available, Real Estate 1.0 came up
with a business model in which you could buy an apartment in high rise
buildings in the middle and upper middle segment and villas in the upper
segment. As the middle class exploded in the post-1991 period, so did the
demand for Real Estate 1.0.
The amenities and features provided
by the Real Estate 1.0 players also evolved to include hi-quality and foolproof
elevators, common areas, gardens, clubhouses, gyms, swimming pool etc. but the
underlying business model remained the same. That the developer will book the
housing “stock” for the buyer and will have no further role to play once the
possession of the apartment is handed over. The buildings were designed for
certain rates of “flow” of traffic, water, electricity, garbage and sewerage,
food and other services but the planning and design for quality and sustainability
was neither a responsibility for the "developer" nor was this explored as an opportunity for
recurring revenue flow.
Why we need to evolve to the next
stage?
As Real Estate 1.0 mushroomed at an
accelerated rate over the past decade and a half, many of these “developed”
areas are already facing severe crises of flow management. Roads are clogged
with growing traffic and parked vehicles. Water tables are depleting at an
alarming rate. Air quality is worsening. Sewerage is raising a stink and
spilling over on the roads and in gardens. Landfills are filling up and raising
a stink. Long hours of power cuts grow the dependency on dirty diesel for power
back up. As food supply gets toxic due to good farming land and irrigation
water being eaten away, people are growing sick and ageing faster.
At the same time, the old business
model of Real Estate 1.0 has created an oversupply of housing stock. The “developers”
are being compelled to cut costs, compromise with quality and make false
promises to keep their heads above water. It’s time therefore to evolve to the
next stage of Real Estate 2.0.
What is Real Estate 2.0?
Real Estate 2.0 is planned and
designed for not just the housing stock but also for the quality and
sustainability of various flows - traffic, water, electricity, garbage and
sewerage, food and other services. This involves integrated and seamless
planning, design and development at the building, neighborhood and city level
and further beyond which is becoming increasingly pertinent in a globalised
world with its social, economic as well as physical interdependency to address
glaring issues like climate change.
The changes from Real Estate 1.0 to
Real Estate 2.0 need to occur at the conceptual level before it is translated
to the physical space. This will not only transform the Indian real estate
industry in India, it also has wide repercussions for a globalised world where
Indian real estate companies have an opportunity to be world leaders. Will they bite the bullet?
