The Maharashtra government, in a bid to provide level playing field to developers and reduce arbitrary decision-making, has amended the development control regulations (DCRs) for the state capital city.
According to the DCR amendments, balconies, flower beds, terraces, voids and niches would be counted in the floor space index (FSI). To compensate for the loss of free-of-FSI areas, fungible FSI to the extent of 35 per cent for residential development and 20 per cent for industrial and commercial developments has been allowed with premium.
Fungible FSI would be available at 60 per cent premium for residential, 80 per cent for industrial and 100 per cent for commercial at the ready recknor (RR) rates. It can be used for making flower-beds or voids; else used for constructing bigger habitable areas.
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The move is aimed at curbing the misuse of ‘free of FSI’, and mobilising much-needed revenue for infrastructure development of the city. The change in law will also pave the way for development of more than 19,000 old and dilapidated buildings in the metro. The government believes the country’s private-sector firms and multinational companies would invest in the redevelopment projects.
It was from this January 1 that the government revised RR rates ranging between 5 per cent and 30 per cent in 716 zones of Mumbai. The government believes that this is expected to shake up the realty sector, and bring in an element of certainty among the investors by cutting down the property prices.
In other changes, no premium will be charged for fungible FSI to be used in the rehabilitation component under the redevelopment of cessed buildings under DCR 33(7) and 33(9). In suburbs where buildings were not cessed, the fungible FSI on the index already consumed in the buildings would be available free of premium. This would help developments by Maharashtra Housing and Area Development Authority as also regular proposals for the redevelopment of the buildings, using transfer of development right in suburbs.
Chief Minister Prithviraj Chavan, who announced the decision an hour before the state election commission’s declaration of election schedule for 27 Zilla Parishad and 10 municipal corporations, said the DCR amendments were meant to strengthen anti-corruption laws and minimise discretion besides eliminating possibility of rent seeking. This will be in the interests of the citizens of Mumbai, more specifically, the buyers of property in the city, he said. “This is an attempt to bring in transparency and reduce arbitrary and discretionary decision-making,” he added.
Responses have been positive. YMS Consultants said the new rules were a step in the right direction. “It is a win-win situation for both the developers and the government,” said Yomesh Rao, its director. “Earlier, the rules had a lot of ambiguity and discretionary powers to be exercised by officers. This discretion or relaxation was over utilised by only a handful of developers in connivance with the officers. It could be seen from the market dynamics that 80 per cent of the development is been undertaken by 20 per cent of the developers due to their clout in discretion with the officers.”
He noted that the only sad part was that even balcony was included in the premium area, which was since inception of DC rules in 1967 always free of FSI. However, the amendments in the DCR are “overall a positive change” in the real estate development.
Raha Realtors said according to the 2012 RR, the average land price for Mumbai city is Rs 4,700 sq ft; therefore the fungible FSI for the residential development shall be available at the Rs 2800 per sq ft, Rs 3770 per sq ft for industrial and Rs 4700 sq ft for commercial use. “Previously, the average premium charges were at the rate 25 per cent of the RR rate,” noted Rajesh Mehta, its director. “Due to the slack down in the real estate market the Builders cannot effort to increase the prices but they shall have to comprise in the Profit Margin.”
Moreover, parking would be available as per the provisions of the DCR, but 25 per cent more at the option of the developer. This would be without premium and without being counted in the FSI. Open space requirements for development of small plots under DCR 33(7) (redevelopment of cessed buildings) has been relaxed.
The requirement under the new rules would be only 1.6 mtrs open space on all sides of plots measuring 600 sq mtrs or less. This relaxation would also be available for small plot development under 33 (10).
The new DCR has given a relief to realty players, as it has relaxed the requirement of 2 staircase for buildings above 24 metres for building of height up to 70 metres and in case of the floor plate of buildings was less than 500 metres. The reduction of floor height in residential flats and shops from 4.2 metres to 3.9 metres would eliminate the need to inspect illegal mezzanine floors.
