Lavasa is the brainchild of Ajit Gulabchand, the jovial, silver-haired chairman of Hindustan Construction Company, an Indian conglomerate known for mega-projects like bridges and dams. He acquired land along the remote hills that slope down to Warasgaon Lake, a 12-mile-long reservoir that supplies water to Pune, from a group of investors hoping to make a little money selling vacation homes—a vision that proved decidedly too small for a man who occasionally commutes by helicopter.
Lavasa will be the first city in India—apart from a few company towns surrounding factories—to be built and governed entirely by a private corporation. It’s also the first city in India to be planned according to the principles of New Urbanism, which advocates walkable cities that commingle business and residential development, offer mixed-income housing, and preserve green space. Lavasa will provide centrally pressurized running water, reliable electricity, sewage treatment, garbage collection, and even fiber-optic connections in every home. These things are so alien in India that when prospective home buyers first saw Lavasa, Gulabchand says, many asked why they couldn’t see water tanks on the roofs, and whether the price of units included a septic tank.
Perhaps the most radical thing about Lavasa is its government—or rather, the fact that it has a government. Most Indian cities are run largely by states, some of which are bigger than many countries. As a result, urban development typically falls to overstretched bureaucrats or state politicians chiefly interested in courting rural voters. The Lavasa Corporation—the company formed to build and run the city of Lavasa—hired Scot Wrighton, an experienced American city administrator, as India’s first city manager. Wrighton says Lavasa offered him “a chance to build a new governance model for a country where governance at the municipal level does not work.” Under Maharashtra state law, the Lavasa Corporation can assume many of the functions normally reserved for the state, though it does not have police powers and cannot levy taxes. It employs private security guards and raises funds from home sales, rentals, and revenue-sharing agreements with businesses. Though the company hopes to eventually transition to a “public-private partnership model,” it’s an open question whether this government would be accountable to Lavasa’s citizens, and not just to investors.
Most big development projects are controversial, and Lavasa is no exception. A dispute with the Indian environment ministry about clearances for the site halted construction, and the completion of Dasve may be delayed. Perhaps the most valid criticism of Lavasa’s developers is this: How can you claim to be pioneering a model of urban development for India, a country where, in 2005, nearly 830 million people lived on less than $2 a day, if you cater primarily to the rich? The least expensive apartments in Lavasa now sell for between $17,000 and $36,000—out of reach for most middle-class Indians. Gulabchand says the company has modified its plans to begin including affordable rental apartments for young professionals, as well as small “starter homes” that will rent for as little as $11 a month, a price laborers and domestic servants can pay. “We’re worried we’ll still get slums,” Gulabchand says. “Do we have all the answers yet? No. It is still an experiment, okay?”