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A Mumbai pattern: Laxity for real estate before election

266 files concerning the department dealing with land-use and FSI policies cleared between June, September.

Written by Shalini Nair | Mumbai |
September 22, 2014 1:28:42 am
The Prithviraj Chavan government in Maharashtra has been busily allotting more floor space index (FSI) to real estate projects. The Prithviraj Chavan government in Maharashtra has been busily allotting more floor space index (FSI) to real estate projects.

In the run-up to the elections, the Prithviraj Chavan government in Maharashtra has been busily allotting more floor space index (FSI) to real estate projects.

The Urban Development Department accounted for the second highest number of files cleared by the Chief Minister’s Office across 49 departments between June and September this year. A total of 266 files concerning the department, which mainly deals with land-use and FSI policies, were cleared by Chavan.

FSI is the ratio of built-up area to plot size, and a higher FSI is desired by all in land-starved Mumbai where per square foot price for a house can go over a lakh.

Questioning such “haste” from a CM criticised more for studying files for too long before taking any decision, BJP Mumbai unit president Ashish Shelar said: “This is clearly a way to generate party funds by favouring particular developers. We will file a PIL and, if our government comes to power, we will review these decisions.”

Chavan though is just following a trend. An analysis of FSI increase policies by previous chief ministers of the Congress-NCP combine over the past 10 years shows that almost all major policies allotting more FSI to the realty sector were cleared on the eve of elections, always on a “case-to-case” basis.

Chavan’s office said that all policy decisions regarding FSI were taken after following due procedure. “In each case adequate time was given to invite suggestions and objections from the public. The preliminary notification for each policy was issued. Most of the policy decisions about FSI were taken six months ago, and in some cases two-and-a-half years ago. In some cases FSI was granted less than the UDD’s proposal,” said a response from the CMO.

Over the past month, Chavan has cleared hike in FSI for private redevelopment of slums along Mumbai’s airport land, for all proposed commercial buildings in the notified airport area, for construction of exhibition and convention centres, and for redevelopment of old buildings in Navi Mumbai and slums in Thane. He has also tweaked rules to allow more incentives for developers taking up cluster redevelopment schemes in South Mumbai and stripped off the heritage tag from much of Chembur,  paving the way for construction of more high-rises.

Chavan has also sanctioned changes in inclusive housing norms so as to exempt almost all Mumbai-based developers from the mandatory provision of reserving a percent of their projects for those from economically weaker sections and low-income groups.

In late August 2014, Chavan had sanctioned the conversion of a prime 2.88 lakh-sq-m salt pan land in Wadala from No Development Zone to Residential Zone. In recent months, he also gave his nod to scaling up the already high FSI for real estate projects that have a public parking lot component and for special township projects.

The price of such ad-hoc FSI increase decisions is borne by the city. For example, before the 2009 Assembly elections, then chief minister Ashok Chavan had relaxed FSI norms for IT parks in a city that is anything but an IT hub, and for those with cattle-sheds in Mumbai. Developers generating free rental units on their plots were granted high FSI with the target of generating five lakh houses over a five-year period.

Five years down the line, construction work has begun on only 16 per cent of the targeted number of homes and merely 0.4 per cent of them, i.e. 2,143 rental units, have been handed over to urban local bodies. The scheme has now been scrapped entirely.

Similarly, while FSI was hiked to generate two lakh budget homes through private redevelopment of housing colonies belonging to the Maharashtra Housing and Area Development Authority (MHADA), merely 200 houses are coming to the board as of date. High FSI was also granted for cluster redevelopment of 19,000 old, run-down tenanted properties housing a few lakh residents. Five years later, just a single project housing 800 tenants has taken off the ground.

The same story holds true for the high FSI granted to developers in return for constructing free public parking lots on part of their plots. The standard FSI for all projects in the island city is 1.33 while in the suburbs it is 1, allowing developers to construct, for instance, 1,330 sq m and 1,000 sq m respectively on a 1,000 sq m plot. However, governments have over the years introduced 25 categories, allowing developers to construct anywhere between twice and 10 times the plot area.

While developers have asked for increasing FSI uniformly throughout Mumbai, citing the high FSI levels in the range of 12 to 25 in Hong Kong, Singapore, New York and Tokyo, urban planners back a variable FSI policy that takes into account the carrying capacity of each locality.

Urban planner Shirish Patel showed how an FSI of 1 in Mumbai would produce the same density as an FSI of 11 in Manhattan. This is because the per capita housing area occupied by a person in Mumbai is as low as 5 sq m while in Manhattan it is 55 sq m. He pointed out that the current policies are lopsided as, from the density point of view, slum redevelopment should have a low FSI while high-income areas can be allowed to go higher. “Also, FSI can also be higher in areas closer to mass transit modes,” said Patel.

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