The draft development plan (DP), which envisages affordable housing, is unlikely to materialise.
The Brihanmumbai Municipal Corporation (BMC) may be pushing for variable Floor Space Index (FSI) in the range of 2.5- 8, which would mean more vertical growth, but affordability still remains a question.
Real estate experts said the cost of land was causing a huge dent in projects. “At present, more than 50-80% of a project’s cost goes in land purchase. Now, with huge premiums, it has become virtually impossible to provide affordable houses,” said Pankaj Kapoor, CEO, Liases Foras, a real estate research firm. “Earlier, when the FSI was increased, the cost of land went up as well.”
The DP talks about transit-oriented development (TOD) zone, which may have affordable housing as it provides rapid transit without any means of additional transportation. The plan proposes curbed parking and reduced vehicle access to discourage higher-income groups from purchasing apartments.
The National Association of Real Estate Development Council (NAREDCO) said the civic body should waive off premium on the affordable housing segment.
“There is no way we can give cheaper houses if we are going to pay such huge premiums and taxes,” said Sunil Mantri, president of the association. “There needs to be some incentive to encourage such initiatives.”
Though the FSI will be hiked in the suburbs, builders have to purchase additional FSI in the form of transfer of development rights (TDR). “We welcome the increase, but, at the same time, others costs are also rising, which discourage affordable houses,” said Shadaab Patel, managing director, Platinum Constructions Private Limited.