RENTAL HOUSING NOT FEASIBLE POSTFSI REVISION, COMPLAIN DEVELOPERS

 

In a city like Mumbai, where affordable rental housing is the need of the hour, many developers have slammed the government's decision to reduce the FSI, as they say it will make rental housing projects unviable, says RAVI SINHA

   The developers in Mumbai are disappointed with the Government of Maharashtra 'bowing to the pressure' from local civic bodies and reducing the Floor Space Index (FSI) for its ambitious rental housing project. Chief minister Prithviraj Chavan, last week, revised the policy and reduced the FSI to three from four. Local civic corporations in the Mumbai Metropolitan Region (MMR) had complained that FSI four would put an unbearable load on their infrastructure, as many developers had planned to build high-rise buildings in such areas.
   Housing experts had also warned that the population density would have increased alarmingly with such high FSI. It would have led to 1,200 flats coming up on just one acre of land. Now, with FSI three, the number of flats will be around 600. The plan was to be implemented in the MMR but never took off in the past five years because the unusually high FSI of four offered to builders, would have strained the civic infrastructure.
   The FSI defines how much can be built on a plot. FSI four means one can construct 4,000 sq m on a 1,000 sq m plot. However, the developers' grouse is that the reduction in the FSI, may lessen its impact on the infrastructure but the cost of construction will increase comparatively. Also, the area per unit, which has been increased, will escalate the cost of construction further. The rental housing project will not be feasible from a developer's point of view.
   Lalit Kumar Jain, chairman, CREDAI and CMD, Kumar Urban Development Limited, says, "Decreasing the FSI level will surely dampen the developer sentiment. Now, developers will be less keen to take up rental housing projects. This will adversely affect the rental housing prospects in the state. Increase in the FSI would have offered some hope to lower and middle-income people, who cannot afford a home in Mumbai, where property the prices are sky-high. With the government decreasing the FSI, the lower and middle-income people will lose out on the opportunity to have affordable rental houses to live in." Jain informs that, "Unfortunately, FAR/FSI is a taboo in Maharashtra. The global science on urban development and economics recommend FAR higher than five, to make the physical infrastructure viable and protect green land. Mumbai had set a great precedent by introducing the concept of rental housing but the government is too sensitive to 'media reports' and they don't feel the need to verify its intentions. This is where Maharashtra's government is behaving in a retrograde manner. We are disappointed with the state government's decision to reduce the FSI from four to three. In times, when providing rental housing to the ever-growing population in a city like Mumbai is the need of the hour, the government has bowed to the pressure from the local bodies and reduced the FSI levels."
   There is a general feeling that the FSI reduction will hurt the 'housing for all' plan that the government wants to implement. Many lower and middle-income groups rely on rental housing, as buying a house of their own is not an affordable option to them. This move is bound to discourage developers from taking up rental housing projects.
   Diipesh Bhagtani, executive director, Jaycee Homes, states, "It is a very good scheme provided, it is implemented in a timely and proper manner. It will give shelter to the migrants at a very low cost and it will also reduce slums. This will give rise to hygienic living, as proper facilities will be available for sanitation, power supply and water. A lot of low income group population will benefit from this scheme. Also, people who come to big cities like Mumbai will have a decent place to live in, with all the necessary basic facilities. The decision to reduce the FSI is a regressive step. An increase in the FSI would have made the project feasible from the construction point of view. Also, instead of improving the infrastructure, the civic body is looking at reducing the load on infrastructure. Looking at the way urban population is increasing, infrastructure will have to be increased and improved. So, why not plan now for the same?" questions Bhagtani.
   Although the government's intention is good, the scheme has some inherent flaws. The primary objective of the scheme is to decongest parts of Mumbai which in its current form many believe, it fails to achieve. It is imperative that the government reconsiders its decision to reduce FSI. Many think it is an impractical decision in a city like Mumbai, where affordable rental housing is the need of the hour. With new FSI in place, the whole project and the scheme become unviable. The government will have to do better to attract developers by giving them better sops that can be used either in this project or in another project, to cover up the cost of the rental housing scheme.
   (The writer is CEO, Track2Realty)

QUICK BYTES    

ACCORDING TO HOUSING EXPERTS, THE POPULATION DENSITY WOULD HAVE INCREASED ALARMINGLY WITH SUCH HIGH FSI. IT WOULD HAVE LED TO 1,200 FLATS COMING UP ON JUST ONE ACRE OF LAND. NOW, WITH FSI THREE, THE NUMBER OF FLATS WILL BE AROUND 600.
   
THE DEVELOPERS' GROUSE IS THAT THE REDUCTION IN THE FSI MAY LESSEN ITS IMPACT ON THE INFRASTRUCTURE BUT THE COST OF CONSTRUCTION WILL INCREASE COMPARATIVELY. ALSO, THE AREA PER UNIT, WHICH HAS BEEN INCREASED, WILL ESCALATE THE COST OF CONSTRUCTION FURTHER. THE RENTAL HOUSING PROJECT WILL NOT BE FEASIBLE FROM A DEVELOPER'S POINT OF VIEW.