After a decision to keep on hold since September, 2009, a move has been recently proposed by the State Government to allow and grant the FSI (Floor Space Index) of 3.0 in place of the present FSI of 2.5 to all those cessed buildings in South Mumbai. The Government is likely to finalize and resolute this proposal within a very short time and as a result, this resolution will now be more attractive and rewarding for Builders to offer redevelopment to 15,000 odd cessed buildings.

Over 12,768 buildings were built before 1940 which fall in ‘A’ category. ‘B’ category consists of 1,169 built between 1940 and 1950. In the category of ‘C’, around 1,058 buildings came up between 1950 and 1970. The highest benefit of bonanza of increase in FSI shall be benefitted to the locals residing in prime locations and most thickly populated areas of Bhendi Bazar, Girgaon, Kalbadevi, Grant Road, Tardeo, Byculla, Dadar, Parel, Matunga, Sion and few in Suburbs.

Cessed buildings in areas of Bhendi Bazar, Sandhurst Road, Grant Road and Byculla are identified under the category of cluster redevelopment and hence, the Builders are likely to bag the FSI more than 3.0, proving a windfall for them.

It is also learnt that the Chief Minister of Maharashtra shall soon declare a decision on additional FSI of 0.33 and TDR for Suburbs in Mumbai. This decision shall arrest the rising prices due to unavailability of land in Mumbai Suburbs. The Builders having surplus TDR and selling it at higher rates are pushing the housing prices beyond reach for common man. The demand of housing is rather more in western suburbs than in eastern suburbs.

South Mumbai, the most expensive area of the property market in the country, may get facelift forever. A Supreme Court also in its order delivered in recent past has paved the way for redevelopment of the entire city and the impact of which would be primarily felt in South Mumbai, dotted with old, crumbling mansions.

While the decision would free the vertical growth in a city that’s clamoring for space, would it not put an enormous strain on Mumbai’s already high-pitched infrastructural factors?

Read more right here… »

It is sure that the extra supply of housing in the coming days would certainly have significant impact on property prices in areas under redevelopment. Even though property markets in several cities have gone down, the degree of correction has been rather not that significantly felt till the date in Mumbai.

According to the amended rules, Builders shall now get up to ‘3’ or even higher FSI for re-development of chawls constructed before 1940. For chawls constructed after 1940, Builders will get, as an incentive, 50% additional FSI of the utilized area for rehabilitating existing tenants.

The Builders community believes that the decision of the Government may throw open large housing stock in the market and eventually soften property prices. This was one of the biggest hurdles in Mumbai’s development. Now, with the Government settling the issue once and for all, it is roughly worked out that the city will have around 200 acres of land open for re-development in the next few years.

The present turn of events owes its origin to the amendment of DCR 33(7) four years ago, which left redevelopment at the discretion of Builders. While the need for redevelopment was widely felt, many objected to the way the State Government went about amending and changing the rules.

Several city-based activists feared that it would lead to indiscriminate development in the island city of Mumbai. Former Mumbai, municipal commissioner JB D’Souza, along with Cyrus J Guzder and Shirish Patel, challenged the State’s decision in Public Interest Litigation before the Mumbai High Court.

The petitioners said the amended rules shall allow Builders to undertake redevelopment of even strong and comparatively new buildings. They argued that this is bound to put a massive strain on infrastructure like transport, water and electricity supply and sewerage while pleading with the Bombay High Court for quashing the order that amended the DC Rule 33 (7).

The petitioners had sought the High Court directive to set up a panel of experts for allowing and certifying the redevelopment of only dilapidated and structurally unsafe structures.

The then Chief Justice of the Bombay High Court, Dalvir Bhandari, and Justice D.Y. Chandrachud had not only upheld the petitioners’ contention but ordered an interim stay on all redevelopment projects falling under DCR. The High Court further had ordered the formation of a Structural Committee comprising three engineers to review structurally weak buildings and decide whether these need redevelopment.

As the pace of reconstruction of cessed buildings by MBRRB was found to be insufficient so as to cover the entire lot of cessed buildings in Mumbai, it was felt by the State Government that the pace of redevelopment could be increased with the active involvement of tenants/landlords/private Builders.

With this in view, the State Government introduced the policy of giving FSI 2.00 for redevelopment of cessed buildings in the year 1984. In the year 1991, the Govt framed the Development Control Regulations for Mumbai. Under these Regulations, the Rule no. 33(7) was formed for redevelopment of cessed buildings in Mumbai and the provisions of the policy of 1984 were incorporated in it.

There was no encouraging response to this scheme from the tenants/landlords. Hence, the Govt. formed a Committee under the Chairmanship of Shri Sukhtankar to overview the implementation of the scheme. On the submission of the Report of the Sukhtankar Committee, the Govt. in the year 1999 amended the Development Control Regulation 33(7).

The highlights of the expected amendments in Development Control Regulation 33(7) after the proposed increase in FSI from 2.5 to 3.0 are expected to be as follows:

In case of redevelopment of 'A' category cessed buildings (constructed before the year 1940) undertaken by the landlord or Cooperative Housing societies of landlord or occupiers, the total FSI shall now be 3.0 of the gross plot area, or the FSI required for rehabilitation of existing occupiers plus 50% incentive FSI, whichever is higher. Under the new policy the Builder is assured of at least 50% FSI for free sale. The policy shall also enable the rehabilitation of all occupants on the same plot, reducing social dislocation.

Self contained flats of minimum 300 sq.ft (As per Govt. G.R. dated 2-3-2009) and maximum 753sq.ft. Carpet area shall be given to the old residential tenants/occupants. Shopkeepers shall be given an area equivalent to their old area.

In case of 'B' category cessed buildings permissible FSI shall be the FSI required for rehabilitation of existing occupiers plus 50% incentive FSI.

As per the permissible FSI stated above, will however depend upon the number of occupiers and the actual area occupied by them, no new tenancy created after the date likely to be declared as per amendments, shall be taken into account while computing the permissible FSI.

Similarly, tenants in unauthorized constructions made in the cessed buildings shall not be taken into account while computing permissible FSI, i.e. the total no. of tenants/occupants should not increase after the date likely to be declared as per amendments. The responsibility for re-housing such tenants whose tenancy may have been created after the date likely to be declared as per amendments or who stay in unauthorized construction will lay solely with the NOC holder.   

Though some buildings may belong to 'C' category (may not belong to 'A' or B' categories), they may be so dilapidated and dangerous that their reconstruction is most urgently necessary to this end, the State Government may grant additional incentive FSI as per Point No.1 above for redevelopment of buildings of any category declared as dangerous, prior to monsoon of 1997.

It is felt by the State Government that a large number of old properties can be better developed by clubbing them together instead of developing each property separately. This leads to lesser congestion and better infrastructure such as internal roads, open spaces, etc. To encourage the composite redevelopment of several cessed properties together, the State Government has identified such properties under Cluster Development and shall grant additional incentive FSI for composite redevelopment.

The additional incentives in FSI for joint redevelopment of A, B or C category cessed buildings on two or more plots are as follows:

a) One plot: 3.0 or FSI required for rehabilitation of occupiers plus 50% incentive FSI whichever is higher.

b) 2 to 5 plots: 3.0 or FSI required for rehabilitation of occupiers plus 60% incentive FSI whichever is higher.

c) 6 or more plots: 3.0 or FSI required for rehabilitation of occupiers plus 70% incentive FSI whichever is higher.

In some cases, it may not be possible to utilize the entire permissible FSI on the same plot, because of height restrictions, fire-safety regulations, etc. In such cases, the NOC holder is entitled to avail the benefit of “Transferable Development Rights” (TDR), to be used in the suburbs or extended suburbs in accordance with the relevant regulations of DCR 1991 for Greater Mumbai. This provision ensures that the scheme remains feasible even where the incentive FSI cannot be fully utilized on the same plot.

In case of Heritage buildings in Grade III and precincts, no permission of the Municipal Commissioner or Heritage Conservation Committee is now necessary if the height of the buildings does not exceed 24 meters (excluding stilt).