MC Explains | MCD order to jack up property prices by 5-10%, recast Delhi housing format

An order by the Municipal Corporation of Delhi (MCD) will now allow residential redevelopment projects in the national capital to achieve a height of 17.5 metres without the need for no-objection certificate (NOC) from the fire department, provided the building has stilt floor as parking.

Prior to this order, residents or builders were allowed to construct buildings only up to 15 metres height where no fire NOC was needed. However, where the height exceeded the 15- metre cap, an NOC was required from the fire department.

Real estate and town planning experts say that with the new MCD order residents can look forward to more height, space and light in redeveloped buildings. However, it will also push up the cost of properties by 5 percent to 10 percent in the coming 1.5 to 2 years.

The new relaxation from the civic authority is likely to change the shape of real estate infrastructure in the city, as many upscale neighbourhoods, which are dotted with mansions and bungalows, are likely to witness construction of luxury apartments in place of these single or double-storey houses.

What is the new order all about?

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Principal Correspondent|Moneycontrol

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According to the new order issued by the MCD earlier this month, residential properties with stilt parking having a maximum overall height of 17.5 m will no longer require an NOC from the fire department to get the building plan approved by the civic body.

Senior MCD officials said that the order has been issued in light of a Supreme Court verdict where it said that buildings with maximum height up to 17.5 metres and having the ground floor as stilt parking should not require an NOC from the fire department for approval of their building plans.

Director (Press and Information) of MCD, Amit Kumar, said that in a case pertaining to Supreme Court Bar Association president Vikas Singh, the apex court in August this year had directed concerned authorities to permit the height of residential buildings up to 17.5 metres with stilt.
Kumar explained that the fire department of the Delhi government, in October this year, also spelt out that in light of the Supreme Court judgment, building plans of residential buildings up to 17.5 metres height with stilt may be sanctioned without referring the same to the fire department.

“In view of these developments, the MCD has made changes in the existing rules and allowed residents or developers to get the building plan sanctioned without an NOC from the fire department for residential buildings up to 17.5 metres in height having a stilt floor,” Kumar told Moneycontrol.

He, however, clarified that the new relaxation will not apply to those residential buildings where stilt floors are not proposed by the applicants.

What are the prevailing rules in Delhi?

According to Kumar, prior to this order, obtaining an NOC from the fire department was mandatory for the sanction of plans for residential buildings. However, the relaxation was given to only those buildings that had an overall maximum height of 15 metres.

“In simple words, earlier residential buildings up to height of 15 metres were not required to have an NOC from the fire department. This rule will continue in the building bylaws. However, if a person or developer wishes to increase the height of the building, then he/she will have to propose a stilt floor in the building plan and then the benefit of the new rule can be availed,” Kumar said.

He said that it was a long-pending demand of residents to raise the cap on maximum height of residential buildings to 17.5 metres for which fire NOC would not be required.

Impact on redevelopment projects in Delhi

Real estate and town planning experts say that on one hand the new MCD order will allow residents to enjoy more height, space and light in redeveloped buildings, while on the other it will push up the prices of properties by 5 percent to 10 percent, the impact of which will be visible in the next 1.5 to 2 years.

Rohit Chopra of Southdelhiprime.com said the new relaxation from the MCD will have two main impacts on the redevelopment market. First, it will permit builders to bring in more luxury features in their projects, as they will have more space to do so, which will result in increase of input cost, further resulting in hike in property rates.

Second, the order is likely to change the shape of real estate redevelopment infrastructure in the city, as people in many upscale neighbourhoods, especially in South Delhi, would opt for luxury apartments rather than bungalows.

“It means that this order will allow people to raze old bungalows and mansions in upscale neighbourhoods like Vasant Vihar, Shanti Niketan, Greater Kailash, Friends Colony, Defence Colony, etc and construct stilt parking with three floors without requiring fire NOC. This will benefit the residents and the builders both, as residents will be able to enjoy more luxurious amenities while the developers will mint more money,” Chopra explained.

He added that the construction of taller buildings will increase the input cost by 5-10 percent in terms of construction and facilities which will result in the corresponding price rise of redeveloped residential properties.
AK Jain, former Commissioner (Planning) at Delhi Development Authority (DDA) and an urban planning expert, echoed similar views, and said that the latest MCD order will bring value addition in property cost and reshape the housing infrastructure in upscale neighbourhoods.

“Now with the new order in place, the height of the floors or ceiling height will increase, which will allow more space and luxury for residents. But all this will come at a higher input cost which means that the prices of redeveloped properties are likely to go up by 5 to 10 percent. This impact will be visible in the next 1.5 to 2 years as the new residential redevelopment projects will take this much time to come up,” Jain said.

He also said that the new order will allow residents to revamp or reshape their old bungalows or single-storey houses into multi-storey (maximum three floors) apartments with stilt parking facility.

“This trend to raze to the ground bungalows or single-storey houses and redevelop them into luxury apartments has already started setting in. But the new MCD order will make it more visible across the city, especially in upscale South Delhi localities such as Vasant Vihar, and Shanti Niketan, among others,” Jain added.