CRZ realignment plea trashed MCZMA Will Not Entertain Any Requests For Reclassification

Mumbai: An application for realignment of the imaginary coastal regulation zone line in the Bandra-Khar area has been rejected by the state coastal zone management authority. The Maharashtra State Coastal Zone Management Authority (MCZMA) has decided not to allow such requests anymore. 

    Akhtar Rizvi, a former member of Parliament and a builder, had sought the reclassification and delineation of the high tide line, the low tide line and CRZ for five projects in Bandra on grounds of "error evident on record". What this means is that the applicant has objected to the area/plot under question being classified as CRZ. 
    The sea-facing Bandra-Khar area is prime property where market rate is approximately 24,000 per sq feet. There are 12 other projects in the Bandra-Santa Cruz belt where similar reclassifications have been sought. 
    While CRZ II norms apply in most parts of Mumbai where development can be undertaken as per the BMC's Development Control Regulations, such development is not allowed in CRZ I and CRZ III areas (traditional fishing areas etc). 
    Officials said that the Union ministry for environment and forests had already issued a notification in November last year to prepare a new coastal zone management plan for the state. "The BMC has already appointed IRS Chennai to undertake the work in Mumbai city and suburbs. The work started in January and will be completed by the year-end," said sources. Similar work has also started in other coastal districts of Thane, Raigad, Ratnagiri and Sindhudurg. 
    Officials said taking up any reclassification exercise now would interfere with the new mapping that is underway. For, any rectification requires a detailed examination on how the error crept in and its rectification. The process involves onsite verification, including corroborative and independent evidence, besides satellite imagery and survey of India maps etc. Hence, the CZMA has decided not to allow any such requests.

Read more...

Developers believe that availability of affordable housing within premium properties is not a practical idea

STRIKE A BALANCE

In a bid to promote affordable housing, the Maharashtra government has suggested building 20% of the flats in residential projects for EWS/LIG housing, thus offering a mix of affordable housing in premium residential projects. 

    "Generally, amalgamation of EWS housing with luxury projects does not go down well with the buyers, although in several states this has to mandatorily be provided in group housing projects. Further, there will be concerns with respect to sharing the common area maintenance costs," says Pranab Datta, Vice-Chairman & Managing Director, Knight Frank India. 
    Although affordable housing is much needed in Mumbai, insisting on 20% compulsory building of affordable housing on private land owned by builders is unfair to the developers, say industry representatives. "In such a case, incentivising is a good option, where developers will be encouraged to build affordable houses in return for some incentives. Currently the matter is under discussion and Marathon Group has filed for suggestion/ objection with the government on the same," says Mayur Shah, MD, Marathon Group. 
    To most developers, the approach to encourage EWS/ LIG housing appears forced considering the limited development options, especially in island city areas. "The plot sizes are usually small except in the cases of mill land or large cluster redevelopment, with constraints of access, utilities, open space and circulation areas," says Manoj John, VP - Corporate Planning & Strategy, RNA Corp. This move would pose challenges to design exclusive buildings meant for EWS/LIG and premium housing with minimal interference, and without compromising on aesthetics, he adds. 
    While developers are in favour of affordable housing especially in urban areas, they are suggesting that the route taken is not the best one. "When government asks to set up an industry in a not so industrialised flourishing area, they offer certain incentives. If a similar approach is followed for the real estate sector, there will be exceedingly good results to be seen," says Boman Irani, CMD, Rustomjee. Irani, who has filed for suggestion/ objection, hopes that when they get a chance to interact with the government, they will try to bring in a win-win situation for both. 
    Additionally, a mix of affordable housing with premium properties is not a practical idea, particularly for allotted plots of small size as 2000 sq. m as there may be issues from architectural and engineering feasibility to social issues such as co-existence of people with different income levels and lifestyle within the same complex. 
    "The amenities in premium projects are highend and come at a cost, which may be a burden for people living in the affordable units within the same complex. In extreme cases, this may lead to social clashes. If at all this is to be done, it should be first done on an experimental basis at plot sizes of 10,000 sq. m. and above," suggests Hemant Shah, Chairman, Hubtown Ltd. 
    However, Om Ahuja, CEO - Residential Services, Jones Lang LaSalle India is of the opinion that there has been a marked dip in premium housing sales in Mumbai over the past two to three quarters, and including a compulsory affordable housing component in such projects is a good means of ensuring there are at least some guaranteed sales. "Despite the subdued sentiments prevailing at the moment, budget housing continues to sell well in Mumbai," he says. From a social perspective, this ruling would also ensure that budget home owners in these projects have the benefit of good infrastructure, which is more or less a given in a premium project. Datta adds that it's a positive intention to provide an accommodation to the EWS of people, in the same habitat as that of the middle and upper income groups. 
    If the proposed rule is made compulsory, developers might have to go for composite buildings with four floors of affordable and 10-12 floors of premium housing. "Here, maintenance will be a cause of worry. Additionally, input costs of developer will go up resulting in cost of real estate going up," adds Mayur Shah. 
    While the move is a positive one it needs to be reviewed with recommendations from developers too since the current proposal has several discrepancies. Such new policies with discrepancies will only add to the numerous approvals a developer needs to get for construction. "The proposal states that units should be given at construction cost, which is very difficult to monitor and differs from location to location. Instead, we suggest that developers be given additional FSI incentives for such projects. Also we suggest the proposal be applicable to plots more than 5000 sq. meters instead of 2000 sq. meters, this will aid better layout design offering good amenities for buyers," says Shailesh Sanghvi, Director, Sanghvi Group of Companies. 
QUICK 
BYTE 
INCENTIVISING IS A GOOD OPTION, WHERE DEVELOPERS WILL BE ENCOURAGED TO BUILD AFFORDABLE HOUSES IN RETURN FOR SOME INCENTIVES

Read more...

THE NEW DCR RULES WILL BRING TRANSPARENCY INTO THE REAL ESTATE SECTOR

A LEVEL PLAYING FIELD, SAYS RAVI AHUJA

 The Development Control Regulations (DCR) for Greater Mumbai, 1991, apply as a regulatory compulsion on building activities and development work in areas under the jurisdiction of Municipal Corporation of Greater Bombay. The Regulation came into force on March 25, 1991 which replaced the DC Rules for Greater Bombay framed under Maharashtra Regional and Town Planning Act, 1966. 
The regulations states (in simple terms) that every person who wishes to carry out development or re-development of a building or alter any building or part of a building is to give a notice to the Commissioner, along with plans and statements. Construction is to be carried out in conformity to the regulations. 
    Under the DCR, the Metropolitan Commissioner has been the final authority for interpretation of its provisions and his decision would be final. The Metropolitan Commissioner could use his discretion to condone provisions of these Regulations except the provisions related to FSI. 
    In January 2012, the Government of Maharashtra announced further amendments to the Development Control Rules (DCR) for Mumbai with the primary motive of bringing in transparency and reducing arbitrary and discretionary decision-making. The new rules would mean pricing based onmaximum available FSI, eliminating the ambiguity that was largely prevalent earlier with respect to disproportionate saleable area. 
What changes have been made? 
    Under the new DCR, areas for balcony, flower-beds, terraces, voids, niches would be counted in the FSI. These were not earlier considered inFSI calculations. 
    To compensate for this loss in FSI, the government has allowed compensatory fungible FSI of up to 35% for residential developments and 20% for industrial and commercial developments. This can be used for bigger habitat area or flowerbeds, voids etc. 
    Fungible FSI will be available at 60%, 80% and 100% of the ready reckoner rates for residential, industrial and commercial developments respectively. 
    Under the new norms developers will have an option of 25% more parking over the DCR limit without premium and without being counted inFSI, which would bring some much needed relief to developers and end-users alike. 
    These rules would bring in transparency and curb corruption as they limit discretionary powers of authorities and provide a level playing field for all developers. Brihanmumbai Municipal Corporation (BMC) expects to earn upto Rs.1,000 crores a year, which would be used in infrastructure developments in Mumbai. 
Will this bring down costs for home buyers? 
    Theoretically, the following results should be achieved as a result of these changes: 
    With the new rules, Mumbai will witness increase in net FSI at 1.79 in the island city and 2.7 in the suburbs, which should ideally bring down costs. The earlier practices where market prices reflected disproportionate 
saleable area had resulted in an increase in cost. 
    The given FSI cap would bring cost rationalisation as developers would need to invest in quality design, maximising revenue by offering maximum value to end-users. However, in reality since no additional concessions are being given to commercial developments, the premium for additionalFSI would increase developer costs and reduce profit margins by upto 10-30%, if the incremental costs are not passed on to the buyers. The government has also issued a directive for 20% of apartments in all big projects to be distributed at construction cost to economically weaker sections. 
    In the immediate term developers may not resort to a price increase but be happy to cut down on the margins, as if they increase prices this would further aggravate the situation of already stagnated sales given interest rates are at peak levels. 
Do the new rules apply to all buildings? 
    The new DCR rules do not apply to cessed, non-cessed old buildings, Mhada layouts, chawls and slums undergoing redevelopment. This would mean waiver of premium for buildings meant for rehabilitation. The compensatory floor space index (FSI) for the saleable component of these structures will, however, be governed by the new rules. 
    Ravi Ahuja, MRICS, 
    is Executive Director, 
    Cushman & Wakefield

Read more...

‘Relax FSI norm for rental hsg’

Mumbai: The MMRDA chief wants the floor space index (FSI) granted to developers to be flexible in order to enable them to construct with viable rental housing tenements. FSI defines the permissible built-up area on a plot. 

    MMRDA commissioner Rahul Asthana said builders often found theFSI of 4 (mandatory under the rental housing scheme) "unviable" in some areas. 
    Asthana, heads an expert panel reviewing the rental accommodation scheme, said the recommendations had been made to the state government in a bid to improve the project. 
    The panel is looking into ways to make the rental housing plan more effective. The state government had planned to construct 5 lakh housing units for low cost rentals ranging between Rs 800 and Rs 1,500 per month. Around 30,000 units measuring 160 sq ft each are under construction, but the scheme has run into a hurdle. "Under the scheme, 15 to 20% of the units should be handed over to the civic body since it was providing inputs," Asthana said. 
    "10% of the stock should be given to the government for special groups while the remaining housing units should be tagged as 'affordable housing' and sold," he added. 
    To improve the infrastructure in the city, the state agency will be putting the elevated road planned from Worli to Sewri on the front burner, sources said. 
Sops must for Metro-III project 
    The MMRDA chief wants the state government to provide incentives in the form of land or grants to ensure that the third line of Mumbai Metro (Colaba-Bandra-Seepz) gets adequate finance. Asthana said the 37.5-km-long route that will be underground needs thrust. Japanese International Cooperation Agency will be funding up to 55% of the project cost, while the MMRDA will contribute 20%, the Centre will cough up 20%. TNN

Read more...

Cluster developers may have to BUILD MINI-TOWNS

If BMC Has Its Way, Builders For Cluster Redevpt Projects Will Have To Build Schools, Roads, Recreation Centres, Etc

Wide roads, pavements, cycling tracks, open spaces the size of Oval maidan, schools with playgrounds, theatres, art galleries, public swimming pools: all this and more could a part of your neighbourhood. Cluster redevelopment through town planning schemes in the island city may make this dream a reality with the Brihanmumbai Municipal Corporation (BMC) keen on ensuring that the developer's role in such projects is not limited to only revamping buildings. 

    If the BMC has its way, redevelopment through the town planning scheme will be incorporated in the Development Plan so that it is mandatory for builders to also develop facilities, open spaces and recreation centres for residents. "The cluster redevelopment policy is aimed at urban renewal and not just the redevelopment of old and dilapidated buildings. Urban renewal means upgrading existing infrastructure and adding new ones that are absent," said officials. This is possible in larger areas earmarked for a makeover. 
    Incidentally, the state government has given its approval for five cluster redevelopment projects, but as the scheme is still in the planning stage, it is not yet mandatory for builders to develop the cluster along these lines. 
    Municipal commissioner Subodh Kumar has set up a subcommittee to draw up guidelines on how to incorporate the town planning scheme into Development Plan. The subcommittee comprises the Mumbai Transformation Support Unit (MTSU), the housing secretary, the Maharashtra Housing Area Development Authority (MHADA), the civic chief engineer Development Plan, and architect and town planner P K Das. Groupe SCE—a Franco-Indian consortium that is preparing the city's Development Plan—is also part of the committee. 
    The subcommittee, which has already held two meetings to discuss the issue, plans to take up a cluster as a pilot project and recommend various public amenities that can be incorporated when the area goes in for redevelopment, said sources. 
    Cluster redevelopment can only happen in phases, but with guidelines in place, developers will be able to incorporate the amenities as demanded by the Development Plan. "We are not looking at those clusters that have been carved out by developers for which they have obtained permission. Our clusters could be spread over two to three such redevelopment projects. So for instance, if we plan a cycling track for a cluster, all the developers whose projects are part of the cluster will have to provide space in their projects to incorporate the track or provide more space for a school etc," said sources. 
    Das said the aim was to assess the benefits in terms of amenities such as open spaces, transportation, and other such facilities. In the past, town planning schemes have been successfully implemented in areas such as Matunga Hindu Colony, Bandra, Khar, Santa Cruz, Vile Parle, Juhu and Goregaon (West). The neighbourhoods have good infrastructure like schools and hospitals, a network of roads to increase inter-connectivity and so on.

Read more...

HDIL makes 800cr land sale to clear debt

Mumbai: Realty developer Housing Development and Infrastructure Ltd (HDIL) is learnt to have sold 10 million sq ft of land for approximately Rs 800 crore in Virar to repay a debt of Rs 3,300 crore. It owns about 70 million sq ft at Virar. 

    Approximately 5 million sq ft was snapped up by three developers for about Rs 450 crore. Ashok Mohanani-led Ekta Housing Pvt Ltd purchased 2million sq ft (built-up area 18 lakh sq ft) for approximately Rs 200 crore, Vinay Unique bought 1.5 million sq ft for nearly Rs 150 crore while Bhoomiacquired a million sq ft for approximately Rs 100 crore. The rest has been picked up by three to four other developers for Rs 350 crore. 
    HDIL managing director Sarang Wadhawan and vicepresident (finance) Hari Prakash Pandey refused to comment on the sale. 
    The developer is close to selling a two-acre land parcel at Andheri for an estimated Rs 300 crore, sources said. This plot of land is part of a large parcel on which HDIL is constructing a residential project, Metropolis. HDIL facing double whammy 
Mumbai: Apart from a sale of 10 million sq ft, realty developer HDIL is also planning the sale of another plot in Andheri with development rights is part of the deal. The plot has a saleable area of 650,000 sq ft. It was also planning to construct around one million sq ft of commercial space as part of the project, the sources said. 
    Real estate analysts say HDIL is facing a double whammy of delay in approvals and weak demand in the Mumbai property market, where it has maximum exposure, more so in the redevelopment space. In case of HDIL, there are concerns that slow recovery of payments from land/floor space index (FSI) sales may constrain cash flows. 
    The key concern is recovery of payments due towards the FSI that the company has already sold, HDIL officials said. Out of the three land deals that HDIL has concluded in the past one year, 40% of the proceeds have been received. These deals are — Popular Car Bazaar at Rs 800 crore, Goregaon land parcel at Rs 650 crore, and Eveready parcel at Rs 86 crore.

Read more...

City’s cluster redevpt gets off the blocks

Mumbai: Less than three years after the state announced its plans for cluster redevelopment, only nine proposals have been submitted to the government, with just five of them getting approval. The one-acre Botawala Chawl revamp is the latest clusterredevelopment project to get the go-ahead. 

    A state government official said the scheme had been a slow starter because in the island city it is more lucrative for builders to redevelop dilapidated, cessed buildings. In cluster, a larger percentage of the profits and carpet area has to be shared with the government. 
    Aside from Botawalla Chawl, the 14-acre Bhendi Bazar, four-acre Saat Rasta, 7.5-acre Islam Mill Compund and 4.5-acre Dr E Moses Road projects have also got go-aheads. A developer noted, "The cluster policy is not very clear, which is hampering submission of proposals. Also, 56 approvals are required before a single redevelopment can actually start. There must be a separate authority to deal with cluster proposals, like the SRA deals with slum rehabilitation." P 2 
BHENDI BAZAR 
PROPOSAL | Area: 14 acres. 282 buildings to be redeveloped. 3,000 tenant families and 1,200 commercial establishments will be rehabilitated. Posh transit flats at Mazagaon 
ISLAM MILL COMPOUND Area: 7.5 acres. Five bldgs, including two 65-storey towers; tenements range from 375 sq feet to 425 sq ft 
DR E MOSES ROAD Area: 4.5 acres. D B Realty to construct five buildings, of which a 20-storey commercial building is under construction 
SAAT RASTA 
Area: 4 acres. Project in Byculla, but called Shreepati Estate, Lower Parel. Plans to house 840 tenant families 
BOTAWALA CHAWL Area: Over 1 acre. Four 20-storeyed buildings plus one building to be sold in open market

Read more...