Redevlopment of properties in suburban Mumbai will receive a major fillip if a notice of motion expected to be taken up during Tuesday’s civic general body meeting is approved. Dilip Patel, BJP’s group leader in the BMC, has proposed raising the cap on floor space index (FSI), which can be availed for such projects by paying a premium amount to the civic body.
FSI is a development tool that indicates the extent of construction permissible on a plot. It is the ratio of built-up area to the total area of the plot.
The notice of motion, if accepted, would bring down the overall cost of redevelopment projects improving their viability.
Under development control regulation, redevelopment projects in the suburbs can avail a maximum permissible FSI of 2. This basically means that a developer can construct up to twice the size of the plot. Of this, an FSI of 1 originates from the plot and can be availed free of cost. Besides this, the developer can avail another 0.33 FSI by paying a premium to the BMC, which is based on ready reckoner rates. The developer has to purchase the remaining 0.67 FSI from the floating FSI available in the open market in the form of transfer of development rights (TDR), which is generated from plots reserved for various public purposes and slum redevelopment projects.
Spiralling of TDR prices in recent times has adversely impacted redevelopment projects. Patel’s notice of motion demands that the 0.33 FSI cap on premium FSI be raised to 0.67 FSI, which would in turn bring down the TDR share to 0.33. “The move will positively affect the real estate market. The TDR rates are controlled by a real estate cartel and keep fluctuating irregularly.
Besides, the TDR rates are significantly higher than premium charged for FSI by the BMC. The move to increase the premium FSI cap will ultimately benefit the end buyer,” Patel said.
Earlier, the Maharashtra Chamber of Housing Industry (MCHI), had urged Chief Minister Prithviraj Chavan to raise the premium FSI cap to rein in TDR prices. Sources close to Chavan said that the government is actively considering the move.