Coastal housing could stabilise realty rates
The relaxation of the Coastal Regulation Zone (CRZ) rules by the Centre is likely to change the face of the city’s coastal areas, where development has been pending for years. It could also stabilise soaring property prices.mumbai Updated: Jul 14, 2010 01:39 IST
The relaxation of the Coastal Regulation Zone (CRZ) rules by the Centre is likely to change the face of the city’s coastal areas, where development has been pending for years. It could also stabilise soaring property prices.
The move will see redevelopment of approximately 2,500 buildings in the Marine Drive-Mahim belt, and an equal number of buildings between Bandra and Borivli.
Pankaj Kapoor, managing director, Liasas Foras, a real estate research firm, said a substantial chunk of land would become available in a city facing a massive space crunch.
“The move was inevitable as there is hardly any vacant land in the city. This provides one of the best opportunities to generate housing stock in the city,” Kapoor said.
Around 38 per cent of Mumbai comes under CRZ, that is 166.32 km of the total 437.71 km of land in the city. CRZ rules are stringent and do not allow for new construction activity within the 500 metres of the high-tide line. But now, with an in-principle approval from the Union environment ministry, housing will be allowed in coastal areas provided the state government has a majority stake in the project, which it plans to have through the Maharashtra Housing and Area Development Authority (MHADA).
For many residents, the relaxation of the CRZ norms will be a boon. Take the case of residents of the 35-year old Sujata society in Santacruz.
“Every five years, we spend large amounts of money on repairs and this is causing a lot of financial strain. Builders have been shying away as the building falls under CRZ,” said resident Parimal Bhatt, who now hopes his building will be redeveloped and he can move into a new flat.
Another advantage of the relaxation is that the city will have larger housing stock, which could help stabilise the rapidly rising realty rates.
“Currently developers are taking advantage of the fact that the city has a shortage of flats,” said Ram Prasad Padhi, CEO, mumbai properties.com a leading brokerage firm.
Kapoor believes the need for state partnership is a good criterion.
“If MHADA is eased out, unscrupulous builders will only construct luxurious houses for the rich and affordable houses will remain a dream,” he said.
Developers also said the move could help reduce realty prices.
“Rates are high because of shortage of houses and the huge demand. This will change once there is a huge supply,” said Lalit Kumar Jain, chairman, Kumar Builders, which has two dozen projects in the city.
Another builder Kailash Agarwal, managing director, Nish Developers, said: “Residents need not go outside city limits as they will be able to afford houses in the city.”