Government pleased Realtors by introducing the proposal for additional FSI

Planning Commission steering committee has mooted providing additional FSI (floor space index; the ratio between built-up area and plot size) as development rights for cities. The committee proposed that it should not come free of cost. The charges for additional FSI and land-use conversions should be at least 50% of the circle rate in the area and should be determined professionally. Added that additional FSI should be permitted selectively.

Recent development of residential property in Mumbai from the Central government’s front has left the developer’s fraternity gung-ho. Mr. Lalit Kumar Jain, CMD of Kumar Urban Development Ltd (KUL) and President of CREDAI says it’s the high time when government intervenes and wakes up to needs of consumers in Mumbai city.

To make perfect usage of urban land is the key to urbanization success where the only option is growing vertically otherwise you’ll be killing agricultural land and green cover meet housing needs. Having little disbelief about the major cities need to grow vertically in order to accommodate burgeoning demand for built-spaces.

Densification in development through scaling up FSI is a step in the right direction and would lead to creation of larger volumes of real estate. Keeping in view the demands of rapid urbanization particularly in high-growth cities.

As this move is implemented then Mumbai’s real estate landscape will witness a sea-change in increasing population pressure the city’s infrastructure related problems.

As today the FSIs are being followed in the metropolis for parking, housing and urban renewal and only benefit projects where slums are being reconstructed and in case of dilapidated buildings as said by Mr. Dhaval Ajmera, Director of Ajmera Realty & Infra India addition to this, which is basically a mode for revenue collection put back into infrastructure development will benefit the city a great deal.

An affordable housing is the need of the hour considering the vast demand and supply gap. Due to high costs it becomes difficult for developers to address the issue successfully. Prices of residential property in Mumbai particularly in top metropolitan across India have redoubled significantly over the years as a result of rising interest rates and various property related taxes, cost of raw materials among others.

Due to high costs it’s very difficult for real estate developers to deliver an affordable housing projects to provide the middle income group (MIG) and lower income group (LIG). Providing extra FSI for an affordable housing projects which is a welcome move by the government to ensure developers meet yield decent margins and at the same time provide spacious and habitable apartments to home seekers. Increase in FSI has a cascading effect on infrastructure demand which would not be able to fix the problem of inadequate real estate by merely provisioning for more real estate.

Unless there’s enough strength, more FSI will only compound the ills of urbanization. The charges for extra FSI need to be carefully determined, so that impact doesn’t eventually translate into rise in prices.