51% norm sinks 100% coastal homes

Unhappy with the government asking for a majority share in coastal redevelopment, builders say they will not be party to the project, dashing hopes of new housing on the coast

Right when realtors and residents in the city were agog with expectation of thousands of affordable homes near the coast, after the government relaxed coastal norms, there comes a glitch.

Builders say they will not touch redevelopment projects along the coastline with a bargepole.


Builders back out of the redevelopment project on the coastline as the government's formula does not suit them

The Costal Regulation Zone (CRZ) notification the government released earlier in the month allowed for the redevelopment of slums and ramshackle buildings that presently are covered under CRZ.

But it has a stipulation that builders say is ambiguous, untenable, and unprofitable, and is driving them away from the project.

The condition states that the government be entitled to 51 per cent share in the overhaul of chawls along the coast.

The sharing bit has put builders off. They claim it is not feasible for them to give 51 per cent to the government, construct houses to rehabilitate current residents, have a saleable component to cover their expenses and still make a profit.

Anand Gupta, treasurer of Builders Association of India, said, "The notification is not clear on the development of chawls closer to the coastal areas. It lacks clarity on the part of 51 per cent partnership with the government.
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It is not stated whether the 51 per cent consists of the total slum area, or the total saleable area or the profits derived from redeveloping buildings. We feel that this condition may not allow slum redevelopment projects in the area to take off as it is not commercially viable."

'It's bad business'

The notification made the FSI of 2.5 uniform across all regions of the city, the interiors and the coast.u00a0 With this, the government expected to give a face-lift to all tumbledown buildings and old chawls near the coast so the city could have thousands of sea-facing affordable houses.

Now, disgruntled builders have already backed out of the deal the government wants to cut with them.
"The terms preclude the possibility of profiting from the project," they say. This means that the government's dream of making affordable houses will crumble like a house of cards.

Mihir Dhruva, managing director, Habitat group, said, "Builders are here to do business and make profits. The government's formula doesn't suit us. We won't be able to profit from this scheme. The government needs to re-think this and come up with a suitable and feasible plan."

Suggesting that the government make the revamp a viable proposition, builders are collectively calling for a rethink on the terms of redevelopment.

Said Gupta, "If the government intends to correct the situation, it should consider charging us Rs 500 per sq ft or so, on a fixed rate basis."

A builder from south Mumbai who deals in SRA projects, said, "The government should increase the FSI from 2.5.
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This will give the buildings a scope to grow taller and accommodate everyone. Or else it's only a business of loss for us. If the government doesn't amend it, the coast will remain the same forever, with slums and filth and garbage.

There is another apprehension the builders have. They claim the notification says that parks, grounds and other open spaces have been declared as a 'no development' zone, another repellent for them.

"Most of the slums have come up on these grounds. If they are declared as no development zone, where can we accommodate the slum dwellers and still hand over to the government the 51 per cent cut?" said Gupta.

Minister speaks

Sachin Ahir, state housing minister, said, "Builders are talking wrong. They need to see beyond their profit and think about giving something to society.

And we, being the government, will see to it that nobody faces any losses. Builders should learn to cut on their profits."

46%
City's total coastal area, slated for redevelopment