In Mumbai, where the average cost of house is an eye-popping Rs 2.8 crore, the Maharashtra government’s new urban renewal scheme, also known as the cluster redevelopment model, was meant to incentivise reconstruction of old and dilapidated buildings in clusters. However, the scheme has taken over four years to roll out and the commercial capital to get two new cluster redevelopment projects.
Chief Minister Devendra Fadnavis recently approved the two projects, following which the Mumbai municipality’s building proposals department has issued the letter of intent (LOI), giving the projects a go-ahead.
Incidentally, both of the projects will come up in Central Mumbai’s Parel region. The first one is a 4.97 lakh square feet reconstruction project involving five properties – undertaken by the Tejukaya Group – in Lalbaug, while the other is 1.70 lakh square feet redevelopment projects, being redevelopment by real estate major Lodha group’s Sainath Enterprise Construction Private Limited, and is set to come up near KEM hospital.
Fadnavis had sanctioned the projects on March 8, just two days before the Model Code of Conduct for the Lok Sabha polls kicked in.
The new cluster policy, which was unveiled on September 9, 2014, will allow developers to reconstruct a cluster of buildings over a minimum plot area of 4,000 square metres availing built-up area incentives, which can go as high as 100 per cent of the area used to rehabilitate the existing tenants or flat owners. However, senior officials admitted that the policy has had almost no takers since its launch.
Redevelopment consultant Sandip Isore has blamed the “procedural complications and a higher input cost” as the main reason behind the lack of response from developers. “The cost of redevelopment and construction of amenities is much more in a cluster redevelopment projects, since it involves redevelopment of a larger area when compared to individual redevelopment projects,” Isore said. “The process of securing permissions, too, is more complicated.”
A senior civic official, meanwhile, said that the government’s move to “further incentivise” reconstruction of individual buildings, both in the island city and the suburbs, had also played a role. Apart from increasing the zonal floor space index in the island city, Mumbai’s new development control regulations have enhanced built-up area for individual plot redevelopments of old and dilapidated buildings.
“A prior approval of the state government is mandatory for a cluster redevelopment policy. One also needs the permission of the high-powered committee of bureaucrats and has to get a lot more pre-approvals as compared to individual projects,” a builder, who did not wish to be named, said.
While the Devendra Fadnavis-led government has brought down the minimum consent required from redevelopment beneficiaries from 70 per cent to 51 per cent, the developer said that the “process of plot amalgamation and acquiring consent” was still fraught with risks.
Echoing the viewpoint, Isore said: “The government must step in to make it easier for the developers. It must also make the cluster scheme more lucrative.”
Incidentally, both the recently cleared projects had already won approvals under regulation 33(7) of Mumbai’s development control regulation, which is meant for individual redevelopment of cessed properties in the island city.
“The new policy permits migration to cluster-based approach,” an official said. Maharashtra had first adopted the cluster-based approach to promote planned redevelopment in Mumbai in 2009.