Saturday, 8 July 2017


Builders now have to pay a premium linked to ready reckoner rate in return for extra FSI.

Chief Minister Devendra Fadnavis has cleared the way for the redevelopment of 56 MHADA colonies in the city by dropping the condition that builders who undertake such redevelopment projects would have to give MHADA housing stock.

Instead, builders will now have to pay a premium which will be linked to the ready reckoner rate in return for extra floor space index (FSI), a senior official in the CM’s office told Mirror.

In 2008, MHADA came out with a policy for the redevelopment of housing colonies, as part of which a builder would get an extra, or incentive, FSI, which was capped at 2.5. To get this, builders had to either pay MHADA a premium equivalent to 40 per cent of the ready reckoner price, or share 67 per cent of the apartments they built using the incentive FSI.

The FSI indicates how much one can build on particular plot of land. If FSI is 1 and the size of the plot is 1,000 sq m, the permissible construction is 1,000 sq m. Currently the island city has a basic FSI of 1.33, while the suburbs have an FSI of 1.

In 2010, the government made it mandatory for builders to share housing stock with MHADA, even though in 2013, it altered the formula to make it easier for builders. Still, most builders found the option unviable and, as a result, a number of redevelopment projects failed to take off.

There are 55 MHADA colonies spread across cities, mostly concentrated in Kalachowkie, Sion-Koliwada, Vikhroli, Ghatkopar, Goregaon and Dindoshi. These colonies accommodate a little over two lakh dwellings.

“Now the housing societies that occupy a plot of less than 2,000 sq m will have to pay only a premium, and the builder will get 2.5 FSI. The condition of giving housing stock has been dropped altogether,” a senior official in the chief minister’s office said.

In the case of housing societies that occupy plots between 2,000 and 4,000 sq m, an FSI of 3 has been given -- whether builders have to give premium or housing stock in return will be decided based on how much land remains after rehabilitating a housing society’s existing residents.

However, in the case of housing societies located on plots of more than 4,000 sq m, builders will be given an FSI of 4, and it will be mandatory for them to give MHADA housing stock.

Rajan Bandelkar, vice president of the National Real Estate Development Council, said: “The state government’s move is welcome, but it should have removed the condition of housing stock for all kinds of plots, not just plots under 2,000 sq m. Due to the housing stock condition, the redevelopment of MHADA colonies has been stuck for the last seven years.”

Now, to take advantage of the 2,000-sq-m rule, instead of redeveloping an entire layout or colony, individual societies will be redeveloped, and limitation will be imposed on offering amenities like parks, schools and swimming pools, Bandelkar said.

“The decision has been taken to benefit builders, clearly. However, if the premium charged from builders is only used to create a stock of affordable houses, it is welcome; but past experience shows that such premiums will be used in some extravagant scheme of the government,” Chandrashekhar Prabhu, town planner and housing rights activist, said.