If things work out as per the latest draft policy of the Development Plan (DP) chalked out by the Brihanmumbai Municipal Corporation (BMC), then the city’s realty sector will witness a construction boom on an area equivalent to 6,380 Oval Maidans.
The only difference is that the development will be vertical. The BMC claims that in the next 20 years, if the 100 per cent FSI it consumed, it will produce a built-up area of 56,808 hectares. As per the draft policy, which is expected to be implemented soon, the BMC has hiked the floor space index (FSI) to 8.
While the FSI in the island city is 1.33 and in suburbs is 1, the proposed FSI will remain constant throughout the city once the policy is implemented.
Decoding the ‘8’
As per the new policy, a developer constructing a building with the base FSI of 2.5 can purchase another FSI of 2.5 (Premium A) by paying 70 per cent of the ready reckoner rate.
In addition, the builder can also use the Transfer of Development Right (TDR) of 0.5 and buy another FSI of 2.5 (Premium B) by paying 100 per cent of the ready reckoner rate. This takes the total FSI to 8.
The BMC has fixed the new FSI slabs at 2, 3.5, 5, 6.5 and 8. In the draft policy, the civic body has calculated the FSI as per the project’s proximity to a railway or Metro station.
For example, a project that is closer to Dadar station will be granted an FSI of 8 against the FSI of 2 for a building that is away from the station. The BMC claims that this will open the property market and make it competitive.
Builders in sync
Calling BMC’s decision a positive step that will yield long-term benefits, developers claimed that the real estate prices would rationalise once the new policy comes into effect. They claimed that with the government making money by selling TDR and FSI at a premium, it would be able to spend on infrastructure.
Rajesh Vardhan, MD, Vardhan Builders said, “Affordable housing will get a boost. Landlords won’t demand irrational amounts. Builders will be able to construct more houses, which will eventually rationalise prices.
By selling two types of premiums (A and B) and TDR, the government will be able to generate revenue in crores. This will enable it to provide better infrastructure, as its taking money from the public.”
According to Municipal Commissioner Sitaram Kunte, the draft will be presented in the House, followed by the gazette post. It will then be kept in public domain, inviting suggestions and objections.
The planning committee will consider the objections and suggestions and the draft will be resent to the House for final approval. Once finalised, the policy must come into effect before April 3, and will remain applicable for the next
TDR to be used in island city?
As per existing norms, a builder can use the TDR only in the north of the city. But with the BMC planning to relax norms, South Mumbai could witness a spurt in new constructions. TDR is the FSI that a builder cannot use in the island city, but is allowed to transfer to his counterpart in the north. But with the new policy in place, a builder can use the TDR in the SoBo itself, and can get FSI 8. This can happen because the clause related to purchasing FSI (Premium B) set by BMC reads that the builder has to first utilise the TDR.