TY - JOUR
T1 - Too slow for the urban march: Litigations and the real estate market in Mumbai, India
AU - Gandhi, Sahil
AU - Tandel, Vaidehi
AU - Tabarrok, Alex
AU - Ravi, Shamika
N1 - Funding Information:
The authors are grateful for helpful comments and suggestions from Leah Brooks, Jan Brueckner, Richard Green, Vernon Henderson, Matthew Kahn, Jeffrey Lin, Mudit Kapoor, Anup Malani, Abhay Pethe, Diego Puga, Shruti Rajagopalan, Jorge De La Roca, Nathaniel Baum-Snow and feedback at the World Bank's Land and Poverty Conference 2018, University of Chicago (Delhi) 2019 conference, Winter School at Delhi School of Economics (2019) and the 14th Annual Conference on Economic Growth and Development (2018), Indian Statistical Institute, Delhi. The authors owe a debt of gratitude to the editor, Edward Glaeser, and two anonymous referees for their constructive reviews that helped shape this paper. The authors also thank Avnika Nagar, Gitanjali Sharma, Shaonlee Patranabis and Shivangi Rajora for excellent research assistance. Funding support for this paper was provided by Omidyar Network to Brookings Institution India Center.
Publisher Copyright:
© 2021 Elsevier Inc.
PY - 2021/5
Y1 - 2021/5
N2 - We use data from the universe of approximately 3000 ongoing formal real estate projects in Mumbai to show that 27.3% of the projects and 42.9% of the built-up space is under litigation. Average construction time is 8.5 years. Using OLS and matching techniques, and controlling for other factors determining time to completion including location, developer experience and project size, we estimate that litigated projects take approximately 20% longer to complete than non-litigated projects. A variety of robustness tests are consistent with this finding. We address potential endogeneity concerns using an instrument - the neighborhood’s propensity to sue. The increase in time to completion increases the total cost of building by at least 30%. We identify a small number of litigated projects in the Bombay High Court dockets and find that so-called Public Interest Litigation, litigation begun by people outside the contractual process (i.e. not apartment purchasers, residents, or contractors), appears to be responsible for a significant share of project litigation.
AB - We use data from the universe of approximately 3000 ongoing formal real estate projects in Mumbai to show that 27.3% of the projects and 42.9% of the built-up space is under litigation. Average construction time is 8.5 years. Using OLS and matching techniques, and controlling for other factors determining time to completion including location, developer experience and project size, we estimate that litigated projects take approximately 20% longer to complete than non-litigated projects. A variety of robustness tests are consistent with this finding. We address potential endogeneity concerns using an instrument - the neighborhood’s propensity to sue. The increase in time to completion increases the total cost of building by at least 30%. We identify a small number of litigated projects in the Bombay High Court dockets and find that so-called Public Interest Litigation, litigation begun by people outside the contractual process (i.e. not apartment purchasers, residents, or contractors), appears to be responsible for a significant share of project litigation.
U2 - 10.1016/j.jue.2021.103330
DO - 10.1016/j.jue.2021.103330
M3 - Article
VL - 123
SP - 1
EP - 14
JO - Journal of Urban Economics
JF - Journal of Urban Economics
SN - 0094-1190
M1 - 103330
ER -