Mumbai Draft Development Plan to open No Development Zone land for affordable housing

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Updated: June 9, 2017 4:52:58 PM

The draft plan has also proposed a permissible FSI of 4.00 for affordable housing projects aimed at bringing down the percentage of land cost per residential unit.

The draft plan has also proposed a permissible FSI of 4.00 for affordable housing projects aimed at bringing down the percentage of land cost per residential unit. (Photo: PTI)

The long-awaited Mumbai Draft Development Plan (DP) 2014-2034 is in the final stages of approval and likely to be implemented this year. Keeping in line with the national objective of ‘Housing for All’, the Mumbai DP also has detailed provisions for affordable housing and the opening of additional land resources in No Development Zone (NDZ) and salt pan lands to make affordable housing a reality in Mumbai.

“We expect increased participation in infrastructure and affordable housing projects from private sector developers. We believe that the upcoming DP would not only decide the spatial framework of the city but also enhance plot potential with updated Floor Space Index (FSI) and Transfer of Development Rights’ (TDR) norms in the island city. However, in our opinion, the proposed FSI is much less than the international standards and unlikely to bring any major change in the skyline of the city,” says Surabhi Arora, Senior Associate Director, Research, Colliers International India.

No Development Zone (NDZ) land opened up for affordable housing
According to a Colliers Research report, to support and achieve the national objective of ‘Housing for All” by 2022, provisions have been made in the DP to open up additional land for affordable housing projects to target the construction of 0.5 million homes. Around 3000 ha of land resources have been amassed by clubbing land that comes under the NDZ (land earmarked for future development), recreational and tourism development area and salt pan lands. These land reserves are located at prime locations in central Mumbai, suburbs and the island city.

The DP has also proposed a permissible FSI of 4.00 for affordable housing projects aimed at bringing down the percentage of land cost per residential unit. Colliers believes that the DP norms are well aligned with the Central government norms to give a push to affordable housing supply in a land-starved city like Mumbai.

Proposed FSI norms not likely to bring much change in the Mumbai skyline
An increase in FSI to allow vertical growth has often been proposed by development professionals to amplify the total buildable area on a plot of land. However, the Maharashtra DP has remained restrictive on the increase in FSI.

The current DP proposes small amendments in the FSI norms.

Key Changes
# TDR allowed in Island city – While the Island city (Nariman Point, Malabar Hill, Wadala, Colaba, Mahim, Sion, Mazagaon, Parel, Worli) will continue to have basic FSI of 1.33, the applicability of TDR would bring the permissible FSI to 2.00.

# FSI of 2.00 in Suburbs and Extended suburbs – Residential and commercial developments in suburbs and extended suburbs like Andheri, Bandra, Santacruz, Ghatkopar, Borivali, Chembur, Vikhroli and Powai would be able to use an FSI of 2.00.

# FSI of up to 4 for MHADA (Maharashtra Housing and Area Development Authority) redevelopment projects – One of the major highlights of the Draft DP is the increase in FSI up to 4.00 for MHADA redevelopment projects as opposed to the previous FSI of up to 3.00. Also, government construction projects will receive an FSI of up to 4.00.

“In countries such as Singapore, Malaysia and the United States, the FSI in central locations can go up to 25. In our opinion, the rationale behind not increasing the FSI significantly is lack of adequate infrastructure in Mumbai. The sudden increase in FSI may result in more infrastructure-related problems, thus we believe that proposed FSI norms are unlikely to bring major changes in the city skyline. Co-operative housing society and MHADA redevelopment projects are seeing some traction in the island city and with the state government’s nod to approve pending projects within the next two years, we expect to witness momentum in completion of redevelopment projects,” says Arora.

The Colliers Research report says that the Union Budget 2017-18 has also highlighted the improvement of the infrastructure sector in India. Similarly, out of the total budget of Rs70 billion, MMRDA has allocated almost 80% of the budget to infrastructure projects in and around the Mumbai Metropolitan Region (MMR). These include metro rail and mono rail projects, Mumbai Trans Harbour Link (MTHL), Wadala Truck Terminal, widening of SCLR, improvement of road network outside MMR, development of water resources at the regional level and several other projects. The completion of these projects is likely to relieve stress on the existing infrastructure and justify any foreseeable future increase in FSI. With several infrastructure projects in the pipeline, the FSI increase is likely to be in conjunction with the infrastructure development.

The government is encouraging participation of private players in infrastructure projects through several financial models such as PPP, Build Operate Transfer (BOT) and Value Capture Financing (VCF). Developers in cities like Pune have taken part in the development of infrastructure projects situated along their residential and commercial developments to enable timely completion and thus enhance the sale factor of their projects by providing improved connectivity. Developers in Mumbai should also get on board and invest in infrastructure projects that will help boost their sales in the long term.

This DP would bring a much-needed clarity on the development proposals in Mumbai and lead to increased participation from private developers in affordable housing and infrastructure projects.

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