STEVE INSKEEP, host:
And let's travel next to a nation with a rising economy and some growing pains. India's middle class is expanding quickly. The supply of middle class housing is not. Many people can now afford a modern home if they could only find one. Creating millions of units of new housing is not easy, and in densely populated cities the effort prompts battles over real estate. NPR's Corey Flintoff reports on a land battle on the outskirts of Delhi.
(Soundbite of machinery)
COREY FLINTOFF: This is a rutted mud road in the middle of an area known as greater Noida. It's being developed for middle-class housing on the outskirts of Delhi, but right now, it's a visual and legal mess. What used to be farmland has been torn up by bulldozers, and the concrete pillars of unfinished apartment blocks are spiking up amid eroding heaps of dirt.
(Soundbite of hammering)
FLINTOFF: This area alone has around 100,000 apartment units in the process of development, but a lot of those deals are now in legal limbo. The farmers who originally owned this land have decided that they were short-changed when they were forced to sell it to the local government. Ajay Kumar Nagar is one of the farmers whose land was taken.
Mr. AJAY KUMAR NAGAR (Farmer): (Foreign language spoken)
FLINTOFF: He says the government took the land under false pretenses, claiming it was needed for urgent industrial development, then turned around and sold it to residential real estate developers for more than 10 times the price. Nagar and other farmers say they went to court to get a fairer share of the profits. To the surprise of nearly everyone, the farmers won. A state high court ruled that development had to stop in the area covered by the lawsuit, and the land had to be returned to the farmers.
That meant tens of thousands of would-be apartment buyers were suddenly faced with the potential loss of the biggest investment of their lives.
Mr. NISHANT SINGH VIRK: I am losing because I have given the 40 percent payment to the builder, which is my savings. This is a loss for me. And the same kind of losses for everybody.
FLINTOFF: That's Nishant Singh Virk, who says he gave about $34,000 in cash -his entire savings - as a downpayment on an apartment that hadn't been built yet. He took out a mortgage for the rest, a mortgage that he'll have to keep paying whether he gets his apartment or not. Although the current lawsuit only affects a few thousand buyers, the legal principle could apply to as many as 100,000.
What's at stake here is more than just money. In India, a modern apartment is the ultimate assurance that a person has arrived in the middle class. India's prosperity means that millions of people now make enough money to afford an apartment, but right now most of those apartments only exist in their dreams. Getamber Anand is the head of a builders' association called CREDAI.
Mr. GETAMBER ANAND (CREDAI): The documented shortage today is 25 million units in the urban areas. And if you look at rural India, add another 70 million units. That is the kind of shortage we're talking of in housing. Now, here is an issue which needs to be addressed.
FLINTOFF: Anand is also the managing director of a development company called ATS that has projects in the disputed area. He says the government should continue to be the middleman in acquiring land from farmers and selling it to developers, to assure fairness for both sides. But he agrees that farmers deserve a bigger chunk of the pie. For its part, the NOIDA development authority defends its profit on the land deals, saying it needs much of that money to build infrastructure for the new developments, including roads, water, and sewage treatment.
The government and farmers reached an agreement in which farmers promised not to block construction for the next three months, and the government agreed to return some of the developed land to the farmers. The part that still hasn't been resolved, though, is how much more money the farmers will receive for their land, and if increased payments are made retroactive, how far back they'll go.
As the same kind of development goes on in cities throughout India, a lot of people have a lot of money riding on that decision.
Corey Flintoff, NPR News, New Delhi.
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