Why it costs a fortune to transfer devp rights

The BMC has so far approved 276 projects with the increased FSI,earning Rs 413 crore.

The fate of many projects set up with the extra FSI is subject to the outcome of a petition challenging the raise. “Developers do not want to put their projects at risk by using the extra FSI as they will not get commencement certificates until the court decision,” said Ashok Shintre,director of engineering services and projects at the BMC. The BMC,in its affidavit in the court,alleged that the petition had been fuelled by a “cartel of four builders” that feared the decision would hit TDR rates.

Slum TDR is largely generated when a developer agrees to provide free housing for dwellers or project-affected persons.

The developer can use the TDR north of the plot,or sell it to others. Earlier,developers had a base FSI of 1,and could add 1 to that by buying TDR from realty players.

The proposed raise in the base FSI would have reduced developers’ dependence on TDR. Within a month of the announcement,TDR rates had plummeted to Rs 1400 per sq ft.

“The increase started six months ago,coinciding with the post-slump realty revival. For the past six weeks,rates have been rising at Rs 100 a week,” said a market source.

Between October and December,TDR of over 1 lakh sq m was sold or consumed in the market. According to BMC records,a total TDR of 3.30 lakh sq m was generated in the market over the last three months,most of it concentrated in the hands of three developers,carrying out slum rehabilitation projects in Kurla,Chembur and Govandi. Just last week,one of these developers was issued TDR of 25,000 sq m,generated out of rehabilitation due to an important infrastructure project.