New norms will bring down realty rates: CM

CLEANUP ACT

First Civic Chief In Over A Decade To Curtail His Own Powers & Streamline Building Approval System

Civic chief Subodh Kumar's proposal to streamline building clearances has been okayed by chief minister P r i t h v i r a j Chavan. Earlier, certain areas in a building such as lobbies, flower beds, voids and lily ponds were not included in the FSI, but several builders sold these spaces to buyers at market rate. Flat purchasers would be encouraged to illegally amalgamate these areas to make their apartment rooms bigger by 35% or, in some cases, up to 80%. 

    Successive municipal commissioners, empowered to grant building concessions, cleared files of certain well-connected developers under political pressure by excluding large areas of their projects from permissible FSI. For example, in case of an upcoming luxury skyscraper in central Mumbai, an earlier civic chief allowed the developer an additional 13,000 square feet on each floor, which was not counted in the FSI. The permitted FSI on each floor here is 17,000 sq ft. 
    "Ever since I have taken over as CM, I have been trying to bring in transparency and check arbitrary, discretionary decision-making to reduce rent seeking and harassment of people dealing with the government,'' Chavan, who was under tremendous pressure from some within his own party to stall the policy, said. Some of these Congress politicians have turned into builders with large stakes in Mumbai's lucrative property market. They lobbied with senior party members in Delhi, albeit unsuccessfully, to pressurize the CM. 
    "This will not only establish a level playing field for developers but also reduce arbitrary decision-making. It will bring about an element of certainty amongst investors and lead to a reduction in property prices,'' the CM said. 
    Under the new policy, premium will be charged based on the Ready Reckoner (RR) rates — 60% for residential buildings, 80% for industrial structures would bring about a "great amount of transparency and create a level playing field'' for builders. Sukhraj Nahar, another builder, agreed, saying the new rules would put all developers on an equal footing. "Buyers will get the promised area of their flats and unscrupulous developers who make tall promises will have to exit the scene," he said. 
    Architect Hafeez Contractor said although these modifications were "fine", much needs to be done to tackle Mumbai's housing shortage. "This is like giving a drop of water to a man dying of thirst. The city needs more FSI," he said. 
    Knight Frank (India) chairman Pranay Vakil said developers were bucking the system by procuring areas outside the FSI. "Now, profits from these additional areas will have to be shared with the BMC," he said. According to architect Manoj Daisaria, the approval process will be streamlined. He, however, added the premium rates were too high. Pankaj Joshi, executive director of Urban Design Research Institute, said BMC officials were approving building projects at their "own whims. This policy is one of the few good things that have happened under the current regime''. and 100% for commercial buildings. However, premium will not be levied on rehab buildings. Developers rehousing tenants of cessed buildings in the island city or existing members of housing societies in the suburbs are exempted from paying a premium. Congress MLA Amin Patel who, at one stage, threatened to resign if a premium was charged on rehab buildings in the island city, said the CM's decision to exempt them and relax the mandatory open spaces around them would boost redevelopment projects. 
    BMC chief Kumar said, "Builders used to bribe their way through the system to procure these extra areas and sell them to the buyer. The consumer paid the developer earlier, now this money will come to the BMC.'' He told TOI that the premium money will be put in a separate infrastructure fund for Mumbai. He said builders whose projects have already commenced but are still to receive the occupation certificate from the BMC can take advantage of this policy. 
    Developer Sandeep Runwal said the policy 
No premium will be charged for fungible FSI to be used in rehabilitation component under redevelopment of cessed buildings. In suburbs, fungible FSI on FSI consumed in existing buildings will be free of premium. This will help MHADA developments as also regular proposals for redevelopment using TDR

SPACE CRUNCHING