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in/forum

Content
1. Definition of Development Management
2. What is Development Management ?
3. Aspect of Development Management
4. Scope of Development management
5. Role of Development management (DM) in Economic development
6. Decision making process in urban development
7. Factors of Decision making process in urban development
1. Legal Framework
2. Stakeholder’s Participation
Urban Development 3. Administrative empowerment
4. Capital Budget
5. Land Management
Management 8. Urban Management
9. Scope of Urban Management
10.Sectors of Urban Management
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Content Definition

12. Performance Parameters Indicators and Benchmarks Development management usually means management of development, management in
13. Performance Management System development, and management for development. Alan Thomas define Development
14. Economic concepts of land management as :
15. Land Value / Price 1. The management of the specific tasks involved in development interventions called
16. Economic principles of land use management of development
17. Land use demand forecast 2. Secondly the normative idea of management oriented towards development ideals
18. Land Supply and Development methods called management for development; as well as the more straightforward notion of
19. Demand side management management in a development context, known as management in development.
20. Aspects of real estate demand 3. Development management is not just a question of getting the task at hand
21. Type of property development completed by the best means available. It also means simultaneously building the
22. Strategies and evaluation of redevelopment capacity to undertake future tasks and learning how to be able to cope with what at
23. Investment and Funding of Urban Redevelopment Schemes present are unspecified task
24. Role of private sector in Development 4. Management for development implies a style of management in which any and
25. Cluster Redevelopment Mechanism every activity is undertaken in such a way as to enhance development.
26. Bhendi Bazaar Redevelopment Project
27. Community participation

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What is Development Management ? What is Development Management ?

Conventional management Development management Conventional management Development management

achieve internal, organizational aims at social goals external to any particular Directing influencing and intervening,
goals by co‐ordinating internal organization by mobilization and co‐ordination
organizational resources of resources from a variety of sources. Work out what is the ‘best the appraisal methods required also need to broaden,
means available to include social research methods, economic and
need for inter‐organizational negotiation and social policy analysis, and so on.
brokering
calculating efficiency or appraising alternative investments, as well as employee
lack of sufficient means (even if all resources from different sources were brought appraisal, the use of motivational techniques,.
together) to impose a given social change.
the creation of strong alliances and mobilization of resources across several organizations
that social goals are generally not amenable to being achieved simply by the
concentration of sufficient effort. ‘Means available’ just is not the right concept for Facilitating a process of conflict Matter of struggling to promote a
working towards social goals. resolution or negotiating between particular view of ‘progress’ in the face
interests in order to formulate widely of opposition from other group’s
using resources for influencing social processes /
accepted goals. powerful interests.
intervening in such processes in favour of certain goals
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What is Development Management ? Aspect of Development Management

Conventional management Development management

Management of
one agency prescribes solutions multiplicity of agencies whose actions impact Development
to problems and results comes directly on the course of development. Manpower
from their implementation.

Multiple Development agencies are trying to influence Management of Management of

In the context of a single
organization capacity building
would require skills in the area
known as
organizational development
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social processes but they also have their own histories Development Values/
Development Resources meant for
and their own policies and practices change as a result Management
Principles/ Ethics Development
of such processes.
And the idea of process is important, because such
actions result from policies on behalf of the agencies Management of
which themselves shift. Development policy itself Finance and Process
should be regarded as process.
with multiple agencies involved these skills need
extending into institutional development.
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SCOPE OF DEVELOPMENT MANAGEMENT SCOPE OF DEVELOPMENT MANAGEMENT

1. Hasten the process of development : Development management intends to apply a 5. Human Resource Development and Capacity Building : Human resource
systemic approach in the management of development programmes and projects. development is a system of developing continuously, and, in a planned way, the
2. Facilitate empowerment: Development management helps to achieve the goal of competencies of individual employees, didactic (प्रबोधक) groups, teams and the entire
absolute, collaborative, adaptive, tacit, and cosmetic empowerment. organization to achieve organizational objectives. Development management
3. Proper utilization and allocation of funds : achieve the project’s goal and objectives promotes human capital.
with reduced cost. Proper manpower and resources management checks wastage of planning
financial resources.
Human Resource
4. Strengthen Development Organization: the five important functions of management Development
Organizing
are planning, organizing, staffing, directing, and controlling.
1. The planning of development activities in advance with a future course of action
helps to effectively achieve pre-determined developmental goals.
2. Organizing is a process of bringing together physical and financial human The Process of
Facilitating Staffing
Development
resources and developing effective relationship among them to achieve
developmental goals.
3. Staffing helps in putting the right person in the right job.
4. Directing aims at influencing, guiding, supervising, and motivating the Evaluating Directing
developmental functionaries and actors for the achieving of development goals.
5. Controlling is a way of applying measurement and correcting the course of controlling
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action in case of any deviation for the achievement of development goals.

Role of DM in Economic development Role of DM in Economic development

Economic development versus economic growth : The distinction between growth and
development is important from both theoretical and policy-making standpoints.
Economic growth is regarded as a process of simple increase in the inflation-adjusted
market value of the goods and services produced by an economy over time.
Economic development is a process of structural change or improvement in the quality of
life and living standards, e.g. measures of literacy, life-expectancy and health care.
Growth and development are considered to be complementary in the long-run but
competitive in the short-run. 16
Agriculture versus industry : In the mid-1960s it began to be realized that rapid
industrialization was an illusion. Agricultural growth came to take its place. Until that
time the importance of the agricultural sector in development had been neglected - a
sector that loomed large in the India in terms of employment for the bulk of the labour
force. There also was to be found the majority of poor people, and many of the urban
poor had migrated from the agricultural sector. Unfortunately, the debate over
development strategy then, as now, often swirled around the relative importance of
agriculture versus industry.
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Basic needs approach : In the 1970s, the general thinking was that the poor masses had
not gained much from development. This led to the adoption of policies in favour of
distribution and the provision of basic needs for the poor. In this approach, the primary
objectives were to provide opportunities for the full physical, mental and social
development of the individual.
This approach focused on mobilizing particular resources for particular groups, identified
as deficient in those resources, and concentrated on the nature of what was to be
provided rather than on income.
The basic needs approach did not rely solely on income generation or transfers; it placed
primary emphasis on the production and delivery to the intended groups of the basic
needs basket through supply management and a delivery system
Shift from Public to Private sector : From the 1980s, the focus shifted to development
initiated in the private sector. It was an important policy shift for India. After decades of
growing government involvement, Indian economy goes into serious fiscal crises which
necessitated a shift from the public to the private provision of goods and services.
Increased openness and reduced government intervention are generally associated with
improved development performance.
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Role of DM in Economic development
Development management applies to the activities of governments to facilitate
programmes of social and economic progress through the system of public
administration. It mobilizes bureaucratic skills to assist in the development process.
Development management requires efficient organization and management in a process
of guiding institutions toward the achievement of given economic objectives and socio-
economic development
Quantitatively inadequate or qualitatively defective system of development management
will not merely retard the development process but may defeat the entire development
effort in an even more decisive manner than any temporary shortage of capital or an
unfavorable monsoon.
It was not until the 1970s that the international development agencies began to give
serious consideration to development management. Before that time much of the
thinking on development management was influenced by optimism in regard to
availability of material, human and scientific resources. Currently, questions are being
asked about the capacity of public administration to bring about the necessary re-
adjustments and increases in productivity to enhance development and for good reason.
Development management has a major role to play.
It must supply the facts, apply the methods and evaluate the record.
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implementation and accomplishment.
Decision making process
in urban development
Decision making process in the domain of urban and regional development processes
represent “weak” or unstructured problems as they are characterized by multiple actors,
many and often conflicting values and views, a wealth of possible outcomes, and high
uncertainty.
Under these circumstances, evaluation of alternative projects is therefore a complex
decision problem, where different aspects need to be considered simultaneously, and
both technical elements, based on empirical observations, and non-technical elements,
based on social visions, preferences, and feelings, need to be taken into account.
This complexity requires multidimensional approaches and specific
qualitative/quantitative methods to analyze and synthesize the full variety of aspects
involved in transformation processes, that range
• From the environmental impacts of urban renewal to its impacts on energy
consumption/production patterns and mobility;
• From the social and economic impacts of a specific urban transformation strategy to its
effects on landscape and cultural heritage.
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Factors of Decision making process
in urban development
2. Consultation Tools: Discussion forums such as round tables, public hearings, town
meetings, community debates, focus groups, or electronic conferencing, surveys, opinion
polls for stakeholders, who are either concerned in or can be influenced by the
development decisions, can be effective tools that help the competent entities to hear
them.
3. Collaborative Planning Tools: These include: constitutional techniques such as
stakeholder representation on decision-making entities, establishment of local-level
planning committees, participatory budgeting, or finance schemes to fund community
oriented development.
Administrative empowerment means to give the employees powers and
responsibilities and encourage them to participate and to be initiative to take the
appropriate decisions. It gives them the freedom to perform their work in their own way
without higher administration direct intervention
Empowerment Techniques:
1. Empowerment through Participation:
2. Empowerment through Involvement:
3. Empowerment through Commitment:
4. Empowerment through De-layering
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Decision making process
in urban development
Decision making is a process of making a choice among a number of alternatives to
achieve a favorite result. Decision making process is composed of eight steps
1. Define the problem: The most important step in decision making, if we define the
problem wrongly, we will not have a right solution.
2. Determine Requirements: Requirements are conditions that any acceptable solution to
the problem should match.
3. Establish Goals: Goals are important to identify valuable alternatives, so goals should
be stated positively.
4. Identify Alternatives: After the evaluation of requirements and goals, alternatives can
be proposed in a way to meet the requirements and satisfy as many goals as possible.
5. Define Decision Criteria: Based on goals decision criteria will categorize among
alternatives must.
6. Select Decision Making Tool: Decision making tools are qualitative tools (e.g. pros and
cons) and quantitative tools such as: Analytic Hierarchy Process (AHP).
7. Evaluate Alternatives Against Criteria: Alternatives can be assessed with quantitative
methods, qualitative methods, or any combination. Criteria can be weighted and used to
rate the alternatives.
8. Validate Solution Against Problem Statement: After selecting an outshined alternative,
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the solution should be tested whether it really solves the problem
Factors of Decision making process
in urban development
Legal Framework: Urban planning legislation is considered one of the
urban planning tools, and a key element of sustainable urban development inputs. Legal
frameworks consist of:
1. Planning regulations: This lay down what development is permitted on urban land.
2. Planning standards: which specify the level and quality to which all formally suitable
land and housing development should conform
3. Administrative procedures: which instruct the official steps that urban development
should follow to be formally acceptable.
Stakeholder’s Participation: Public Participation in urban planning aims to give people
a say in the development decisions that may affect them and to ensure that development
interventions are convenient with the needs and preferences of the population that they
are intended to benefit
Tools available for participatory development planning are :
1. Information-Sharing Tools: Traditional media such as newspaper, radio, and television
or electronic media such as websites and emails or via meetings and presentations with
the communities in a given area can be used to serve as tools for a participatory planning
process.
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Factors of Decision making process
in urban development
Capital Budget : capital budgets have multiple objectives-as instruments of fiscal policy,
as windows on the net worth of public bodies, and as vehicles of development,
particularly in the area of economic infrastructure.
The capital budget is the “blueprint” of needed spending for the current or first year in
the capital plan as part of the municipality’s annual budget based on current revenue
projections for the municipality.
Land Management : Land policy is the set of intentions embodied in various policy
instruments that are adopted by the state to organize land tenure and land use.
Land administration comprises the functions involved in implementation land policy, i.e.
land business operation.
land management can be seen to play a coordinating role between land policy and land
administration
Land management involves the processes which allocate land resources "over space and
time according to human needs, wishes and requests, within the framework of human
technological invention, political and social institutions, and legal and administrative
measures.”
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URBAN MANAGEMENT Scope of URBAN MANAGEMENT

Definitions i) Planning, implementation, monitoring of urban infrastructure and services. Effective

According S K Sharma : the Urban Management can be described as the set of activities
which together shape and guide the social, physical and economic development of urban
areas. The main concern of urban management, then, would be intervention in these
areas to promote economic development and wellbeing and to ensure necessary
provision of essential services.17
According to Ronald McGill : urban management is seemed to have a twin objective:
• first to plan for, provide and maintain a city’s infrastructure and services
• second to make sure that the city’s government is in a fit state, organizationally and
financially, to ensure that provision and maintenance.
Urban Management is essentially comprises systematic linking of guidelines and strategies
with scarce resources (time, money, personnel, law, land) by means of spatial and/or
thematic action programmes.
The main tools of urban management are medium-term investment and budget planning,
assistance programmes and agreements, and a cross-cutting medium and long-term
management system for land, infrastructure and planning to ensure timely creation of the
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and efficient delivery of urban services to raise the quality to living of people residing in
urban areas.
ii) Effective and efficient management of projects and programmes for achievement of
urban development goals.
iii) Promotion of intersectoral coordination in the urban sector. Coordination with the
health, public health, education, women and child welfare, etc. for the holistic urban
development.
iv) Promote community participation and involve NGOs and civil society organizations in
the effective provision and management of urban services.
v) Enhance the capability of Urban Local Bodies and Urban Institution in carrying out the
duties and responsibilities entrusted to them under the 74th constitution amendment
(India).
vi) Strengthen urban administration and governance to deal with various problems
associated to urban development.
vii) Effectively implement urban policies for enhancing contribution of both formal and
informal sectors towards urban development
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Sectors of URBAN MANAGEMENT Urban management : Urban Land

Management of urban land is of the prime responsibility of local

Urban Environment/ governments. The equitable, efficient and effective management of urban
Natural Resource land is essential for city development. A few important issues related to
Management urban land management are follows:

Urban a) Accurate and timely mapping, gathering and maintenance of land related
Infrastructure
Urban Land
data;
Urban b) Fair and quick land registration procedures to facilitate effective
administration of property rights;
Management c) Clear cut and fair mechanisms for assembly, transfer and disposal of land
including a transparent market valuation mechanisms;
d) Effective policy and participatory planning of land users
Urban Economic Urban Social e) Efficient and effective procedures and systems for generating revenue
Development Services from land through taxation and user fees.

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Urban management : Environment

Urban management : Infrastructure
Natural Resource Management
It is one of the important duties and responsibilities of local government to Infrastructure development is critical to urban development.
do proper management of natural environment of cities. The local government, therefore, need to do proper planning, provisioning,
The cities natural resources must be managed in a such a way that it is free operation and maintenance of urban infrastructure such as
from pollution and environmental degradation. If the cities, especially large • Road network
towns environment are not managed properly, it would result in serious • Water supply and treatment system,
irreplaceable depletion of essential resources and affect safely to public • Solid waste management system,
health and the capacity of natural systems to sustain development. • Provision of electricity,
Therefore, there should be proper management of water resources, air • Urban transport system
quality and land resources in urban areas in tune with environmental • Housing,
protection and sustainable development • Communication systems ranging from telephone services to
telecommunication.

A proper coordination among various divisions such as planning,

constructing, operation and maintenance is essential for management of
urban infrastructure.
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Urban management :
Social Services
Local governments are often called upon to manage a diverse range of social
services in their areas. These services include
• urban health care facilities through dispensaries and clinics;
• education at least pre-primary and primary education;
• security from crime, public safety from fire and natural disaster and during
emergencies;
• welfare programs of physically challenged and old age;
• poverty alleviation programe and provision of recreation i.e. open spaces,
parks and part of cultural facilities.
Provision of urban social services is equally important to that of urban
infrastructure. The provision of urban services also called for establishment of
schools, hospitals, old age home, care house for physically challenged,
recreation clubs and parks. The judicious allocation of resources between
various development infrastructure and service infrastructure is essential for
holistic urban development.
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Management of Urban services
One of the key functions of urban management is the effective delivery of
urban goods and services for the improvement of quality of life of people living
in urban areas. The government of India as an urban reform agenda used
“Service Level Bench-marking (SLB)” as a tool to enhance accountability for
service delivery.
The SLB was initiated by the Ministry of Urban Development, GOI, as part of
the urban reform agenda and developed a common framework for monitoring
and reporting on service level indicators. This section will cover GOI managing
of urban services aspect.
This can be broadly discussed in following heads:
Performance Parameters Indicators and Benchmarks
Role of Stakeholders
Prioritizing Urban Services Management Initiatives
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Role of Stakeholders
After discussing about the parameters and indicators of various services and their
management, it is now pertinent to discuss about the role of various stakeholders in
performing service level benchmarking. The stakeholders involved in the process of SLBs
(service level benchmarking) are follows:
i) Central Government : The Government of India will take the lead in disseminating
information about the service level parameters and building wider acceptance.
ii) State Government : The responsibility of the state government will be to
periodically evaluate the SLBs as an input for its decisions related to policy,
resource allocations, providing incentives and penalties, channelizing technical and
manpower support and regulatory considerations
iii) Urban Local Bodies ULBs are the most important stakeholders for the
institutionalization of SLBs. The role of ULBs is to generate performance reports on
SLBs periodically by undertaking following exercises:
a) Systems for capturing data;
b) systems for collection and analysis of performance indicators;
c) Systems for assessment and evaluation of performance;
d) systems of decision making;
e) systems for operational decisions and plans;
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f) systems to take corrective action for performance improvement.
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Urban management :
Economic Development
Local governments influence economic development through policies and
programmes, which has relation with investment climate, distribution of goods
and services and other basic amenities; and provision of services through
taxation and other mechanisms.
These affect various sectors of urban economy:
a) Primary sector – economic activities, for example, agriculture activities
performed in peri-urban areas in Indian context Nagar Panchayats;
b) Secondary Sector – activities relating to manufacturing and construction;
c) Tertiary Sector – functions relating to services activities such as banking,
insurance, information technology.
The local government needs to make necessary urban employment provision
in under to provide sustainable livelihood to urban migrant labourers. Strong
urban economy is essential for faster urban development.
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Performance Parameters Indicators and
Benchmarks
The four important basic urban services for which performance parameters
have been identified are:
i) Water Supply : The management of water supply primarily related to
reach and access to quality service and prevalence and effectiveness of
the systems to manage the water supply networks.
ii) Sewerage : The performance indicators relating to sewage management
broadly includes reach and access of the service, effectiveness of the
network and environmental sustainability. and also financial sustainability
of operations.
iii) Solid Waste Management : The solid waste management performance
deals with reach and access, effectiveness of network operation and
financial sustainability.
iv) Storm Water Drainage : The performance indicators with regard to storm
water drainage include extent of network and effectiveness of the
network.
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Role of Stakeholders
iv. Parastatal Agencies : The Parastatal will play similar role to that for ULBs. They are
unlike ULBs have to put systems in place for performance management. The need
for periodic reporting of SLBs to ULBs and its disclourse is important in both the
cases.
v. Bi-lateral / Multi-lateral Aid Agencies As far as role of bi-lateral / Multilateral aid
agencies is concerned. Various urban governance and infrastructure improvement
programme initiated and funded by bi-lateral and multilateral aid agencies can
dovetail with and further strengthen this initiative.
vi. Citizen and Civil Society Citizens should be engaged with ULBs through Area
Sabhas, Resident Welfare Associations (RWAs) and other such civil society
organizations in examining the SLBs and suggesting remedial actions.
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Prioritizing Urban Services Management

Performance Management System Initiatives
Should Support The Government both centre
Desision-making Level and state as well as bi-lateral
Assess and Evaluate Decisions on Policy, and multi-lateral agencies
Performance Resource Allocation, have initiated several
Municipal Council and
Admin Leadership projects and programmes on
urban management for
Report Feedback
improving the quality of life
of people residing in urban
Analysis Level Collate and Analyze Operational Decisions and
areas. One of such
Performance Plans
Indicators programmes is AMRUT which
Head of Dept. Level aims to provide basic services
Report Feedback (e.g. water supply, sewerage,
urban transport) to
Corrective Action and households and build
Data Generation Level
Capture Data Performance amenities in cities. AMRUT
Operational Units Improvements will improve the quality of
life for all, especially the poor
Should Translate and the disadvantaged is a
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Economic concepts of land Economic concepts of land

• In economics, land comprises all naturally occurring resources whose supply is
inherently fixed. , it is a factor of production besides, labour and capital.
• To planners, land is an intangible space on which development activities take place,
contributing to its use and value.
• To farmers, it is the productivity of soil.
• Land is thus a social and physical entity.
Land economics can be defined as the study of the relationship between human being
and land. Land in the aspect which covers the totality of the environment and it’s
fundamental to man’s survival. This is true because this provides us with working space,
and also provides us with biological and natural capital in addition to other resources of
land. It is also our source of food, clothing and a host of other raw materials.
Let’s say it like this, land economics can be defined as the economic relationship
between land and man. However, land economics is the subject matters that deal with
man’s economic use of resources of earth, (the economic, biological, and institutional
factors) that controls, affect his use for those resources.
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Neoclassical theory of land economics focusses on the marginal productivity of land.
• The Law of Rent states that the rent of a land site is equal to the economic advantage
obtained by using the site in its most productive use, relative to the advantage obtained
by using marginal (i.e., the best rent-free) land for the same purpose, given the same
inputs of labor and capital.
• According to Ricardo, parcels of land differ in their fertility. The most fertile land is put
into production first, and as agricultural production expands less and less fertile parcels
are added; the rent for less fertile parcels is lower than the rent for more fertile
The main focus of economics is land, because it is less rewarding to focus more on land
without relating it to other determinant of production. And this also involve a variety of
relationships, whom are always concerned with problems and situation in land, its uses
and control is then regarded as a factor of strategic importance.
Urban land economics is interested more about problems of urbanization, housing,
redevelopment, industrial and commercial location also with urban real finance and
marketing.
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Land Value / Price Land Value / Price

Market value shall mean the price at which land and buildings could be sold under
private contract between a willing seller and an arm’s-length buyer on the date of
valuation, it being assumed that the property is publicly exposed to the market, that
market conditions permit orderly disposal and that a normal period having regard to
the nature of the property, is available for the negotiation of the sale.
The price at which land and buildings could be sold under private contract is to be
construed to refer to a monetary amount if the land and buildings were to be sold in the
open market.
The use of the words private contract exclude sales by auction to the extent that this
would realize a lower price than sales following proper marketing as between a willing
seller and an arm’s-length buyer, and serves to emphasize that it is a realistic estimate at
the date of valuation
“willing seller and an arm’s-length buyer” reinforces the dominance of economic reality,
expressed through transactions in the open market, as the best price reasonably
obtainable by buyer
The term “on the date of valuation” refers to the specific nature of the valuation, which
assumes that the terms have been negotiated and the transaction completed at the date
of valuation.
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The connotation “it being assumed that the property is publicly exposed to the market”
means that the asset would be exposed to the market in the most appropriate manner
to effect its disposal at the best price reasonably obtainable in accordance with the
market value definition.
The connotation “that market conditions permit orderly disposal, and that a normal
period having regard to the nature of the property, is available for the negotiation of
the sale” assumes that market participants are alerted to the opportunity through
market exposure, but not that a hypothetical/unreal or false market has been created or
is to be assumed, neither is a forced sale or one subject to compulsion simulated by the
definition, but the sale is conducted in a manner appropriate to actual market
conditions. A normal marketing period is one which will vary with market conditions for
the type and class of property, land and buildings.
There is a fundamental difference between price and value. Market price designates
what a property might be sold for at a specific period in time; value designates a
property’s actual worth in relation to other similar properties
For decision-making about land the relevant concept is in any case not the price but the
opportunity cost. In economic theory the opportunity cost is defined as the cost of the
most appropriate alternative use, i.e. the cost of a piece of land as compared to what
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could have been done with that same money if it had been used for something else.

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Economic principles of land use
Von ThUnen's early theory of location differential rent, based on transportation savings
and competition among land uses, was a more complete economic analysis set in
mathematical form.
In von ThUnen's model, each crop (land use) can bid a rent per unit of land at each
location (distance from market), equal to the value of the product minus production
costs and transport costs to the market.
The maximum rent offered for any location by producers of a particular crop depends
solely on distance from the market (through transport costs) when non land production
costs are assumed everywhere equal for each crop.
Land use in Rural and Urban area
Rural, or agricultural, land use theory considers land an essential input for production,
with the physical characteristics of the land often determining the land use. Rural
economic activities account for most land area. These activities locate in rural areas due
to relatively high land-capital and land-labor ratios.
Urban economic activities tend to use less land but generate higher output (and land)
value. Urban economic activities generally have lower land-capital and land-labor ratios,
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Economic principles of land use
William Alonso combined location and quantity in land use decisions and extended the
use of bid rent functions from agricultural to urban land use theory .
Equilibrium in the land market involves one price (that of land) but two aspects (lot size
and distance). Then "every user of land, whether a resident, an urban firm, or a farmer,
determines his location by the point of tangency of the lowest of his bid price curves to
come in contact with the price structure," and
the market will be in equilibrium when
(1) no user of land can increase his profits or satisfaction by moving to some other
location or by buying more or less land and
(2) no landlord can increase his revenue by changing the price of his land.
Site and quantity decisions must be based on substituting land for transportation costs
and other inputs.
The new urban economics has focused primarily on residential land (which accounts for
most privately developed land in American cities) but applied microeconomic theory to a
wide range of urban topics (pollution control, zoning, suburbanization, discrimination,
local government finances, and community development), using sophisticated
mathematics to ground the resulting economic relations on individual behavior. 18
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Economic principles of land use
This new urban economics develop internally transportation systems' capacities and
costs, particularly congestion costs.
It is assumed that relative prices determine and reflect rational behavior, and that
institutional structures are more determined by than determining of economic behavior.
Rent gradients continue to absorb differences in utility or profitability, determine the
location of industries and residences, and determine the intensity of land use in each
activity.
Techniques for studying transportation modal choice and residential location, which
base decisions firmly on individual maximization behavior, have been extended to
industrial location.
With production related to location decisions, the location question can be approached
from Von Thunen's view (which use will bid the most for a given piece of land) or
Weber's view (which site will yield greatest profit for a given firm).
Starting with a form for the profit function or bid rent function, the maximization
process leads to the multinomial logistic model, which allows estimation of parameters
affecting land use and production decisions. So far, however, empirical applications of
these methods have not explicitly considered distance or transportation costs.
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Economic principles of land use
Walter Isard synthesized the von Thunen and combined modern production theory with
location theory to extend urban-type externalities to the agricultural sector. Transport
inputs to production (and marketing) measure factor services required "to overcome
resistance encountered in movement through space where friction is present. In a space-
economy, we obviously wish to minimize these, ceteris paribus" (बाकी सब एक सा होने ऩर)
Topography, transportation systems, and congestion can make effective economic
distance different from mileage. Neighboring uses or other activities in the metropolitan
area may affect the potential rent of land at any effective distance. Thus, externalities
play an important role in land use theory, particularly in urban activities. Changes in
demand or supply lead to an evolving structure in the general equilibrium system, with
technological advances, transportation costs, and the mobility or pace of depreciation in
capital stock influencing the rate of structural change.
Changes in demand or supply of land may also result from changes in environmental
features such as soil erosion, climatic changes, silt accumulation, or catastrophes such as
floods and fire.
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Economic principles of land use
This new urban economics develop internally transportation systems' capacities and
costs, particularly congestion costs.
It is assumed that relative prices determine and reflect rational behavior, and that
institutional structures are more determined by than determining of economic behavior.
Rent gradients continue to absorb differences in utility or profitability, determine the
location of industries and residences, and determine the intensity of land use in each
activity.
Techniques for studying transportation modal choice and residential location, which
base decisions firmly on individual maximization behavior, have been extended to
industrial location.
With production related to location decisions, the location question can be approached
from Von Thunen's view (which use will bid the most for a given piece of land) or
Weber's view (which site will yield greatest profit for a given firm).
Starting with a form for the profit function or bid rent function, the maximization
process leads to the multinomial logistic model, which allows estimation of parameters
affecting land use and production decisions. So far, however, empirical applications of
these methods have not explicitly considered distance or transportation costs.
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Land use demand forecast
Prediction: Estimate of a specific event happening at a specific point in time.
Projection: Estimate a future outlook based on historical trends.
Forecast: Estimate a future scenario based on assumptions of likelihood
Factors affecting land supply and demand forecast 19
Population factor : Cohort Survival.
Housing factor : Household Formation.
Employment factor : Labour Force Outlooks
Socio-Economic factors :
Historical Trends : Share Breakdown , Sectoral Growth
Market Economies and Policies : Global, National, Regional
Land Economics : Competition between land uses , land Supply
Interconnectivity : Infrastructure, Sectoral Clusters, Institutional Linkages
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Land use demand forecast Land use demand forecast

Cohort Survival method of population forecast : 19 Employment forecast 19

• Take an existing population in year 0;. • Population forecast as a base to forecast employment.
• At year 1, the population is one year older;. • Labour force participation rates are applied to population age 15+ to obtain the total
• Some children are born and added to the population;. labour force locally.
• Some people die and are subtracted from the population ; and • Unemployment rates are applied to the total labour force to obtain the employed
• Some people move in and some out yielding a net gain or loss of migrants labour force locally.
• This becomes the new year1 population and then the process repeats itself to year 2 • Net in-commuting is accounted for to estimate available jobs locally
and so on.
Historical inputs:
Housing Forecast • Population growth.
• Household formation is a function of the probability of different age groups • Household formation and sizes
occupying types of housing. • Housing mix by type.
• Household formation (headship rates) assumptions are socioeconomic phenomenon: Forecast assumptions:
• Getting married. • Permits and applications
• Having children. • Policy goals
• Getting divorced. • Market trends
• Becoming widow/widower • Land supply
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Land use demand forecast method Socio-Economic factors

http://www.frontdesk.co.in/forum Taken from : Demand forecasting for land use and transportation planning in the GTAH - Y. Shah
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Taken from : Demand forecasting for land use and transportation planning in the GTAH - Y. Shah

Land Supply and Development methods Land Supply and Development methods

Industrial Land Supply and Development
The SEZ Act of 2005
National manufacturing policy (2011) : opened doors to FDI, thereby delivering on the
promise of improving the 'ease of doing business' environment.
State industrial development authorities like RIICO : Create land supply through
methods which surpass the political and administrative complexity of land acquisition .
Delhi Mumbai Industrial Corridor Development Corporation (DMICDC): delegation of
administrative control to a SPV. The SPV utilizes a hybrid model of acquisition and land
pooling for projects in Dholera, whereas it facilitates land acquisition for the upcoming
Jewar International Airport as part of the recently delineated Dadri Noida Ghaziabad
Investment Region (DNGIR).
Residential land supply and development
Integrated township policy : Uttar Pradesh in 2003, introduced an ambitious ‘Hi-tech
Township’ policy. allows 35-40% developed land to be reserved for residential and 4 to 6%
(revised to 8-10% in 2007) each for commercial and pollution free industrial purposes;
however, interestingly and importantly either can be allowed to increase up to 30%. This
effectively converts a housing township into an industrial township, essentially harnessing
the economic benefits of the Information Technology and provide for marketable
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estates/properties. 20
land pooling – Town planning scheme in Gujarat and Maharashtra
The Land pooling scheme provides for a minimum land size of 10 acres (4 hectares) with
minimum 10% land reserved for open spaces, minimum 35% for roads, parking,
public/semi-public uses. The scheme also talks about allotment of alternative
developed/serviced land plot to land owners pooling land, where mixed use (residential
and commercial) shall be allowed and no development charges shall be payable against
such land plots allotted.
Integrated Industrial Areas (IIAs) & Maharashtra Industrial Policy of 2013-18 : The City
and Industrial Development Corporation of Maharashtra(CIDCO) & Maharashtra
Industrial Development Corporation (MIDC)
IIAs are essentially townships where landuse distribution allows for 60% land under
industrial area and the rest under other uses. This distribution was lately revised to an
80-20 ratio by the 2018 Maharashtra Industrial Policy. The minimum area requirements
remain 40 hectares (100 acres). IIAs on lands acquired by MIDC/CIDCO or assembled by
private purchase/Joint Venture are to be governed by and follow development control
regulations laid down by MIDC and CIDCO respectively 20
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Demand side management Aspects of real estate demand

Supply of and demand for developed land are essentially two sides of the same coin
Two approaches to stabilising the property market and preventing adverse
consequences arising from an exuberant market.
1. increase land and housing supply to meet demand,
2. introducing demand-side management measures as and when necessary to
suppress external demand, short-term speculative demand and investment
demand.
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The most simple and aggregate model of demand is: more people in a urban area (as
residents and workers) create more demand for built space, which creates a derived
demand for land (a place to put the buildings).
Aggregate forecast provides a good starting point, but is not sufficient by itself to
forecast the demand for real estate products. There are many types of products,
consumers, and locations:
• Product differentiation. There is not one product called "urban land." Rather, there
is a demand for many types of real estate products (e.g., residential and commercial;
within residential, single-family or multi-family units; within single-family units,
different lot and housing sizes; for a given size, different quality and price).
• Market segmentation. Consumers of residential, commercial, and industrial land
have different characteristics that cause them to have different preferences for real
estate products and, by extension, land.
• Location. The characteristics of a lot may allow the construction of a building, but
the characteristics of the neighbourhood and larger sub-area contribute to value and
demand. Location matters.
other aspects of demand are : • Individual preferences and constraints. • Sub-
markets. • Durability of real estate products. • Public policy. • Demand and supply
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interaction.

Aspects of real estate demand Type of property development

• Individual preferences and constraints. The idea of "market segmentation" introduced
above deals with differences among large groups. But in urban those groups comprise Property development covers a wide range of property types, including single
tens of thousands of individual decision makers who are not homogeneous and have family homes, townhouses, commodities, manufactured, mall, mixed-use etc.
different tendency to accept different real estate products. Residential Commercial Industrial
• Sub-markets. The variability of products, consumers, and locations creates sub-markets Single-family detached Retail Light manufacturing
that are more or less substitutable. Rural density Strip centre Heavy manufacturing
• Durability of real estate products. In the residential market in particular, the long-life of Low-density Neighbourhood centre Industrial Incubator Mid-
buildings means mobility and filtering must be taken into account when forecasting density Power centre
demand. Warehouse
• Public policy. Policy can affect all aspects of market demand and supply relationships. High-density Community Centre High-tech/flex space
Future absorption cannot be predicted without assumption—if not explicit than implicit— Duplex/Townhouse Power centre Research and development
about future public policy: will it be about the same, and if not, how will it differ. Condominium Regional mall
• Demand and supply interaction. What people often refer to as "historical demand" is, Low-density Office
technically, the intersection of demand and supply factors at some price. In other words, High-density Low-rise
a forecast housing absorption must result not only from a consideration of demand-side Apartments Mid-rise
factors (e.g., demographics, income), but also supply-side factors: if geography or public Low-density High-rise
policy strongly limit buildable land, then land prices rise and the amount of land (and, by Mid-density Campus
correlation, housing) changes as demand and supply factors get into equilibrium with the High-density Medical , Educational , Cinema
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Strategies and evaluation of Strategies and evaluation of

redevelopment
General framework and criteria for setting redevelopment priorities and developing
strategies to enable and accelerate successful redevelopment.
The framework incorporates economic, environmental and social factors in evaluation of
the marketability and community benefits of brownfield site redevelopment. 21
FRAMEWORK FOR SUCCESSFUL REDEVELOPMENT
1. Target Geographic Areas
I. Mixed use areas with highly exposed, low income, minority populations
II. Industrial areas with large land tracts and significant job creation potential.
III. Waterfront/ CBD areas that are attractive to businesses
2. Identify Sites in Each Geographic Area
1. Use local knowledge and land use surveys
2. Contact local economic development offices
3. Coordinate with city urban planning activities
4. Use National and state environmental databases
5. Use GIS to incorporate a variety of data sources
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redevelopment
3. Characterize Sites Based on Marketability
1. Low Marketability; public funding necessary.
2. Marketable for specialized developers; could make use of alternative funding
sources. (Public-private partnerships)
3. Highly Marketable; traditional sources of funding. (Private sector takes the lead)
4. Screen Sites for High Potential Community Benefits
1. Neighborhood Characteristics : Poverty rate, Unemployment rate
2. Site Characteristics : Potential Human Health and Environmental Risks, Market
value
3. Redevelopment Plan Characteristics
1. Economic return : Redevelopment has potential to generate revenues for
the community (taxes, profits).
2. Social return : Redevelopment has potential for job creation,
neighborhood revitalization, improved aesthetics, and other business
opportunities.
3. Timeframe :Reasonable time period for completion of project in order for
benefits to be realized by current area residents.
4. Partnerships : Partnerships between local governments and stakeholder
groups may enable projects to progress more quickly and smoothly.
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Strategies and evaluation of Investment and Funding of Urban

redevelopment
5. Evaluate Potential Impacts of Redevelopment Alternatives
1. Environmental Benefits : Reduced health risks, Prevention/Reduction of air
pollution (mobile source emissions)
2. Economic Benefits :Job creation and potential for higher incomes, Improve
labor market efficiency, Increased tax revenues
3. Social Benefits : Increase in easily accessible services, Affordable Housing
Improved city services
4. Social and Environmental Costs
5. Economic Costs
6. Develop Strategy for Redevelopment Activities
1. Work with multi-stakeholder groups to establish priorities for public funding
efforts and an action plan.
2. Work with multi-stakeholder groups to establish priorities for development
projects and to identify a diverse base of funding sources.
3. Coordinate with development and environmental agencies to market sites,
streamline development process, and manage community involvement.
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Redevelopment Schemes
Urban redevelopment or renewal involves improvement of the physical environment
and its quality. A proper evaluation of urban re- development cannot, therefore, be
undertaken without also considering the overall fiscal impact of the various programmes
on the community. Since the size of such redevelopment must be limited under Indian
conditions be- cause of budgetary restraints on subsidized ventures - apart from the
initial outlay needed to pay compensation for acquiring high-cost land in congested
localities - it is to be considered whether a better course of action would not be to limit
public expenditure for improving the environmental facilities of the blighted areas,
rather than trying to clear these.
Financing Tools of urban redevelopment are
Value Capture Financing (VCF) is a type of public financing that acts as a tax collection
mechanism and aims to recover part or full of the value that public infrastructure
generates for private landowners. It owes to act as a funding source
for urban investment
Appropriate VCF tools can be deployed to capture a part of the increment in value of
land and buildings. In turn. these can be used to fund projects being set up for the
public by the Central/ State Governments and ULBs. This generates a virtuous cycle in
which value is created. realized and captured. and used again for project investment.
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Investment and Funding of Urban Investment and Funding of Urban

Redevelopment Schemes Redevelopment Schemes
Value Capture Methods and scale of intervention 22 Value Capture Methods and scale of intervention 22
S.No Value capture method Frequency of incidence Scale of
S.No Value capture method Frequency of incidence Scale of intervention
intervention
1 Land value tax Annual rates based on gain Area-based
7 Vacant land tax Recurring Area-based
inland value uniformly
8 Tax increment financing Recurring and for a fixed period Area-based
2 Fees for changing land use One-time at the time of Area/ Project -based
(agricultural to non- giving permission for 9 Land Acquisition and One-time upfront before project Area/ Project-based
agricultural) change of land use Development initiation
3 Betterment levy One-time while applying for Area/ Project-based 10 Land pooling System One-time upfront before project Area/ Project-based
project development Rights initiation
4 Development charges One-time Area-based Various methods of Value Capture have been used by the Rajasthan state :
(Impact Fees) Urban Land Tax Section 20 Notification -Government of Rajasthan. Local Self Government.
5 Transfer of Development Transaction-based Area/project-based Urban Development & Housing Department
Rights Tax on Conversion of Land Section 90-A of Rajasthan Land Revenue Act, 1956
Development Charge/Impact fees Section 106 Rajasthan Municipalities Act.2009
6 Premium on relaxation of One-time Area (Roads, railways) TDR and Incentive FSI : Policy of TDR –Rajasthan- 2012
rules or additional FSI / Project (Metro) Premium on relaxation of rules or additional FSI : RTIDF betterment levy on premium FAR
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for height upto FAR of 4 rather then 1.33

Investment and Funding of Urban

Role of private sector in Development
Redevelopment Schemes
Nagpur proposes to plan and develop intense TOD zones around metro stations in the ABD Development projects with involvement of private sector
by land pooling and readjustment, alternatively called as Town Planning Schemes (TPS). Monetizing Land For private finance For service delivery For technology
The Smart City Plan proposes to use TPS in the site under the following arrangement- 23
• For un-built plots, the authority will appropriate 40% and return 60% of the land to the
Waterfront Rooftop solar Water supply and Smart parking
owner
development smart metering
• In the rare case where a built property is impacted, the owner shall be compensated in
any of the following manners- Redevelopment Car Parking Waste collection Cycle sharing
• land at an alternate location within the TPS area
• Increased FAR Transit oriented Wastewater
Street lighting IT enabled
• Transfer of Development Rights development recycling solutions
Key Questions in Revenue Models of PPP
• Whether solely on the basis of returns on investments, is the project do-able through
PPP framework ?
• Whether the financial returns from the project are more than the cost investments ?
• Whether the project returns are attractive for the private sector to partner ?
• What revenue the private partner could share with the government is in case the
project is attractive for private partnership ?
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Phasing of Development in TOD Station Area in Nagpur (Smart City Plan Nagpur, 2016) • Are there any economies across projects that could be captured ?

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Cluster Redevelopment Mechanism Cluster Redevelopment Mechanism

Land Reconstitution in Maharashtra Bhendi Bazaar Redevelopment Project
According to the cluster redevelopment mechanism, each residential As the port of Bombay flourished under British rule, numerous traders and merchants from
occupant will be given the carpet area occupied in the old building, diverse communities came to establish trading markets. A multitude of migrant workers and
subject to a minimum carpet area of 30 m2. laborers came with them, settling near the docks. The traders and migrants built residential
In the case of nonresidential occupants, an area equivalent to that quarters, with shops on the ground floor and residential tenements on the upper floors.
occupied in the original building will be given. Bhendi Bazaar, in the C Ward of Mumbai, abutting the J.J. Flyover and home to the Dawoodi Bohra
community, is one such area. Today, Bhendi Bazaar is one of the most congested parts of Mumbai,
with densely populated buildings, narrow streets bustling with activity, a lack of open spaces, and
outdated urban infrastructure.
The aim was to
transform Bhendi
Bazaar into a vibrant
residential and
commercial space with
modern civic amenities
and open spaces.
project comprising of
BP = building proposals, DCR = development control regulation, EIA = environmental impact 16.5 acres of landform
assessment, GOM = Government of Maharashtra, m2 = square meter, MCGM = Municipal has approx. 250 existing
Corporation of Greater Mumbai, MHADA = Maharashtra Housing and Area Development Authority, buildings, 1250 shops Saifee Burhani Upliftment Trust (SBUT) undertook the ambitious task of
MMRDA = Mumbai Metropolitan Region Development Authority, MoEF = Ministry of Environment and 3200 families. redeveloping more than 65,000 m2 of the area under the cluster
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redevelopment scheme of DCR 33(9) in July 2011
and Forests, NOC = no objection certificate. 24

Community participation Community participation

Different levels of community participation in development projects.
• Believe in the spirit of 'Ubuntu' - a South African concept encompassing key values such as
Level I : Community receives benefits from the service, but contributes nothing
solidarity , conformity , compassion , respect , human dignity and collective unity.
Level II : Some personnel, financial or material contributions from the community, but not involved
• Listen to community members, especially the more vulnerable , less vocal and marginalized
in decision making
groups.
Level III : Community participates in lower level management decision making
• Guard against the domination of some interest groups or a small un- representative leadership
Level IV : Participation goes beyond lower level decision making to monitoring and policy making
clique. This article pleads for a co-operative spirit and for a watch for oligarchic tendencies among
Level V : Programme is entirely run by the community, except for some external financial and
community leadership.
technical assistance
• Involve a cross-section of interest groups to collaborate as partners in jointly defining
Whoever wants to get involve in participatory development should 25
development needs and goals, and designing appropriate processes to reach these goals.
• Demonstrate an awareness of their status as outsiders to the beneficiary community and the
• Acknowledge that process-related soft issues are as important as product- related hard issues.
potential impact of their involvement.
Any investment in shelter for the poor should involve an appropriate mix of technological and
• Respect the community's indigenous contribution as manifested in their knowledge, skills and
social factors, where both hard- ware and software are developed together. In this regard many
potential.
scholars recognize the importance of a multi-disciplinary approach to project planning and
• Become good facilitators and catalysts of development that assist and stimulate community based
development. The inclusion of a social scientist, and someone with the appropriate skills from
initiatives and challenge practices which hinders people releasing their own initiatives and realize
within the community, to work together with planners, architects and engineers is very
their own ideals.
important. A multi-disciplinary approach will only succeed if technical professionals recognize and
• Promote co-decision-making in defining needs , goal-setting, and formulating policies and plans in
include the contributions of their social scientist partners in the planning process.
the implementation of these decisions. Selective participatory practices can be avoided when
• Aim at releasing the energy within a community without exploiting or exhausting them.
development workers seek out various sets of interest, rather than listening only to a few com-
• Empower communities to share equitably in the fruits of development through active
munity leaders and prominent figures.
processes whereby beneficiaries influence the direction of development initiatives rather then
• Communicate both programme/project successes and failures - sometimes failures are more
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in a passive manner.
informative.

Reference : Recommended Study Material Reference : Recommended Study Material

1. India: The Challenges of Urban Governance by O.P. Mathur
15. Urban Governance and Finance in India M. G. Rao and R. M. Bird
2. The Challenge of Urban Government Policies and Practices by M. Freire and R. Stren
16. Development Theory and Policy in the Third World - K R Hope
3. Urban Governance and Management: Indian Initiative by P.S.N. Rao,
17. IGNOU Self Learning Material (SLM) - Post Graduate Diploma in Urban Planning
4. URDPFI vol I and II, Ministry of Housing and urban Affairs.
and Development
5. People’s Participation in Urban Governance, by K.C. Sivaramkrishnan,
18. Land Use in Economic Theory Principles and Prospects - Douglas H. Brooks
6. Local Governance in India by Niraja Gopal
19. Demand forecasting for land use and transportation planning in the GTAH - Y. Shah
7. India’s Urban Confusion Challenges and Strategies by M Ramachandran.
20. Experiments of urban land supply and development: India - Aparna soni and
8. Urban Governance, Voice and Poverty in the Developing World by Ursula Grant, Nick
Triveni prasad nanda
Devas, Philip Amis.
21. AN INTEGRATED APPROACH FOR BROWNFIELD REDEVELOPMENT - A Priority
9. A Hand book of Urbanisation in India, KC Shivaramkrishnan, Amitava Kundu & B N
Setting Tool http://www.smartgrowth.org/
Singh.
22. Value Capture Finance Policy Framework 2017
10. Public Finance: Policy Issues for India, by Sudipto Mundle,
23. Game Changers in Transit Oriented Development
11. Municipal Finance in India – An Assessment by P.K. Mohanty et all,
24. smart-urban-redevelopment-india through floor area ratio incentives
12. Fiscal Federalism in India by Vithal & Sastry,
25. Community participation in development: nine plagues and twelve
13. Costs and Challenges of Local Urban Services: Evidence from Indian Cities by O.P.
commandments - Lucius Botes and Dingie van Rensburg
Mathur et all.
14. approach to state-municipal fiscal Relations options and perspectives - O P Mathur
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