Affordable housing to receive a fillip under Mumbai Development Plan 2034

What does MDP 2034 seek to achieve?

MDP 2034 is likely to spur real estate activity in the city and also pave the way for the development of much-needed affordable houses in the Maximum City.

Of the 16,700 hectare No Development Zone (NDZ) in the city, 12,900 hectares of land has now been classified as Natural Area (NA), which includes parts of Sanjay Gandhi National Park, mangroves, salt pans and parts of Film City and Aarey Milk Colony, along with a few regions under Coastal Regulation Zones (CRZ).

MDP 2034 proposes to unlock 3,700 hectares of public and private land currently tagged as NDZ – this massive land unlocking will open new avenues for real estate development.

It sets a target to construct 10 lakh affordable homes through unlocking of NDZ. This will prove to be a major push for the affordable housing segment, and much needed to accommodate the ever increasing population in the city.

It is perhaps the largest addition to the city’s develop-able land banks in recent history.

FSI Increased For Residential, Commercial Buildings

FSI levels in the island city have also been increased up to 3, in the suburbs FSI has been retained at 2.5. This is likely to boost construction activity. Earlier, the FSI in the island city was lower that the effective FSI allocated to suburbs which has now been amended. The FSI in island city has now been raised above the FSI in the suburbs which will lead to a higher potential supply in the island city.

BMC has earmarked Rs 2,400 crore for FY 2017-18 for implementation, whereas the financial outlay earmarked over the next three years is about Rs 5,000 crore. This means that there is enough financial backing to get the plan implemented on ground rather than it remaining on paper.

Will the plan spell disaster for an already crowded Mumbai city?

Some urban planners are of the view that just as the city messed up after 600 acres of mill land was released in 2005, history may repeat itself now if infrastructure does not keep pace with new real estate supply.

“If infrastructure development does not keep pace with increased construction, the stress on civic amenities and traffic may worsen in the city,” says Anuj Puri, Chairman – ANAROCK Property Consultants

Despite the long wait, the approval of the DP 2034 could be a silver lining amid the recent upheaval and slowdown triggered by regulatory reforms such as the Real Estate (Regulation and Development) Act. 2016 (RERA) and the Goods and Services Act (GST), says Shishir Baijal, Chairman & Managing Director, Knight Frank India.

The move would bring the much needed stability in the real estate market.  Key measures such as significant increase in the FSI for residential development particularly in South Mumbai and the thrust on affordable housing through the opening up no development zones and salt pan land would boost the national vision of ‘Housing for All’. Another unprecedented move is the fillip towards commercial space development. The burning demand for commercial real estate in the space-constraint city has received the government’s attention through increased FSI for building  office spaces, he adds.

Ramesh Nair, CEO and Country Head, JLL India is of the opinion that the new DP “creates a massive opportunity for affordable housing projects and ensures a fine balance between environment and development. The land earlier earmarked as salt pans have been opened up for housing, while no further construction is allowed in the Aarey Colony apart from the approved construction of metro car shed. We see great promise in this plan as it is supported by a robust financial outlay laid out by the BMC for on ground implementation.”

“The creation of open space of 120 hectares at Eastern Waterfront through PPP is in line with improving the per capita open space ratio of Mumbai. This opens Mumbai’s trademark waterfront for development of recreation, retail and entertainment projects and will give rise to re-development of real estate along the corridor, much like what Canary Wharf re-development did for London’s office district,” he adds.

“For years, Mumbai’s Development Plans focused on residential real estate development. This time around, the focus has been equally placed on commercial real estate, with twin focus – first, on decongesting existing CBD areas as also extending the ‘walk to work’ aspect to newer locations. The Mumbai Development Plan 2034 brings in a serious effort as ensuring the target of affordable homes get constructed within a reasonably short time, given the opening up of various categories of land on which such construction was earlier not allowed. Similarly, there is a acceptance of the fact that GDP growth will not happen only because of industrial production, but commercial activities will play a major role in enhancing GDP growth – the DP shows significant hikes in FSI for commercial, retail and hospitality. Similarly, for financial technology and bio-tech parks, medical and educational hubs. The FSI hike for commercial real estate is expected to not just enhance GDP growth, but also encourage employment and economic development,” says Niranjan Hiranandani - National President Naredco

Vandana.ramnani@nw18.com