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Delay in implementation of Mumbai's Development Plan 2034 may lead to pain in the market: Experts

The Excluded Part (EP) of Mumbai’s new development control regulations (DCR 2034) was to come into force from October 24.

Vandana Ramnani @vandanaramnani1

With the implementation of the excluded part of Mumbai’s Development Plan 2034 now being postponed to November 13, experts say that the unabated delay may lead to pain in the market and increase holding costs.

The Excluded Part (EP) of Mumbai’s new development control regulations (DCR 2034) was to come into force from October 24.

"The Mumbai Development Plan 2034 extension saga continues unabatedly. Mumbai city awaits clarity on policy for the longest time leading to pain in the market and for land owners / developers leading to increase in holding cost. Decisions are pending as major impact on FSI changes are yet to be approved by the government," said Ravi Ahuja, senior executive director, Mumbai & Developer Services, Colliers International India.

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On Tuesday, the urban development department of the state had ordered postponement of the DCR 2034 stating that "there were typographical errors and mistakes in the EP notification (published previously) that required corrections."

Reports said that the government may consider a proposal to extend new concessions to slum developers. The new development plan was sanctioned on May 8. Modifications proposed in permissible floor space index or FSI for development and redevelopment projects was sanctioned and approved in the excluded part in September.

While the Mumbai DP 2034 was passed earlier this year, it is still to be implemented in real. This means that the city is still following the earlier DP of 1991. Thus, to this effect, the claims that there have been delays by the Municipal Corporation of Greater Mumbai (MCGM) in approving projects stands true. However, this doesn’t take away the fact that the MCGM on its part has also delayed giving approvals for several projects, says Anuj Puri, chairman - ANAROCK Property Consultants.

Shishir Baijal, Chairman and Managing Director, Knight Frank India, is of the view that the project is a mixed bag for stakeholders as there are some forward looking provisions as well as some challenging areas.

Among the positives, one of the forward-looking inclusions is the aspect of linking permissible FSI to the road width.

The norm on linking of Transfer of Development Rights (TDR) to road width, which was notified in November 2016, has been carried forward in the DCPR 2034. Further the DCPR 2034 has extended the use of FSI available on payment of premium which was earlier permitted only in suburbs to the island city and linked that to road width as well. Such provisions were absent in previous plans and led to the construction of tall residential/commercial towers on narrow roads, adding pressure to the existing infrastructure. Going forward, we believe such instances would be reduced, he said.

The DCPR 2034 also attempts to addresses the issue of traffic jams outside commercial buildings. The plan incentivises commercial development by providing higher FSI for commercial development only on roads greater than 12 meters wide otherwise the FSI is same as that for residential. Commercial establishments witness far greater vehicular congestion as compared to residential buildings. Hence, with these provisions, traffic snarls outside commercial buildings can be curbed to an extent.

Further, there are many buyer specific initiatives in the DCPR 2034 such as adopting RERA's definition of carpet area and emphasis on affordable housing. Earlier version of the development plan used to follow Maharashtra Ownership Flats Act’s (MOFA) definition of carpet area. Adopting a uniform definition would help reduce confusion among buyers.

DCPR 2034 lays special emphasis on affordable housing by providing incentives to developers to construct the same. Thus, we expect to see houses being delivered at affordable prices in the coming years, thereby helping buyers realise their dream of owning a house in Mumbai.

However, there are some aspects that require greater introspection on behalf of the authorities. For instance, the provision of reducing the minimum irrevocable consent from 70 per cent to 51 percent for redevelopment of Maharashtra Housing and Area Development Authority (MHADA) buildings. There are many reasons why the redevelopment of MHADA buildings are languishing and one of the issues is with respect to the transfer of title of the flat. Reducing consent clause may not help solve this problem as other policy level interventions are required, adds Baijal.

The Mumbai Development Plan 2034 seeks to open up 3,700 hectares of land that was earlier designated as no-development zone (NDZ) for construction of residential real estate and homebuyers can expect housing units of 30 sq m to be available in the range of Rs 60 lakh to Rs 75 lakh.

Experts say that going forward with more housing stock getting added in the affordable category, prices may correct by 10 to 15 per cent but this is possible only if the increased Floor Space Index (FSI), promised under the blueprint for the city’s development for the next 16 years, is available at rational prices and not at a premium.

Under the new Development Plan, over 3,000 hectares of land would be available for building affordable houses after unlocking the NDZ land. Apart from this land, an additional 300 hectares of salt pan land will also be available for affordable housing. About 10 lakh affordable houses will be built on these lands by 2034. Salt pan lands are those where large water bodies have dried up over years, leaving behind salt and other minerals.

vandana.ramnani@nw18.com

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First Published on Oct 24, 2018 08:22 pm
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