Land use regulation exists in various countries in various forms, primarily serving as an instrument for controlling the allocation of land and its development. Density regulations are a class of land use regulations aimed at controlling development which are operational in several cities, here, in our case, Mumbai. However, in a burgeoning metropolis like Mumbai, where the land and housing needs are very high, regulations like these constrain the supply of housing through a reduction in available built space. Density regulation might impede the effective allocation of land (and built space) which results in widely varying impacts. The market impacts of this regulation essentially stem from its constraining the operation of land (and housing) markets. Ceteris paribus, density regulation constrains markets by either fixing supply or raising demand or both, thus, giving rise to either price rise or quantity reduction or both. Moreover, with increasing population and rising housing shortage, informal and poor quality housing in the form of slums and squatted settlements has been widespreading, more so in the suburbs where this is resulting in crammed conditions. Also, the existence of slums and their location indicates 'gentrification', in which spatial displacement of certain social and economic classes takes place. Essentially, in a filtering process operating through the mechanism of high land prices, the poor get displaced spatially. A rapid rise in house and land prices in Mumbai resulted in investment in property taking speculative dimensions. Density regulation might have fueled it by restraining the supply of housing units, making it worthy to hold built-up land and housing units. Further, high land prices in Mumbai, primarily due to excessive demand and regulatory restrictions, give excessive returns to the factor of land which could be deployed either to obtain deviances or to seek lobbying support or even for legal wrangling.